We’ve been talking to phone companies both big and small this week at MWC, and they’ve basically all agreed on one point: the RAM crisis is hitting hard, and phone prices will almost certainly increase where they haven’t already.
For a major global brand like Xiaomi, volume is one lever the company can pull. To balance out the increased costs, Angus Ng, Xiaomi’s director of communications and public relations, tells us, “We can potentially go for bigger volumes, especially in the mid-range segment and entry-level segment, so then we can try to lower costs in that area.“ Pulling other levers, like scaling back flagship specs, isn’t considered an option. Says Ng, “…we have to chase the latest and intend to showcase our best.” The Xiaomi 17 and 17 Ultra launching this week in Europe match last year’s pricing, but it sounds like that trend might not hold in the long term.
“It’s like trading stock”
Pricing is so unpredictable that suppliers are treating RAM like the catch of the day. Kaiwei Tang, CEO and cofounder at Light, says the company survived a “horrendous” year last year thanks to tariff chaos, and now faces yet more uncertainty in the RAM crisis. Tang says that Foxconn, Light’s supplier and phone manufacturer, laid out the reality a couple of months ago.
“You can order memory, but they don’t tell you how much it costs until the day they ship. So it’s like trading stock.” He says Light can still refuse the order, “Yes or no, they don’t care if you don’t want it,” but that means they’ll just turn to the next company in a long queue for the sale.
If there’s a kind of silver lining to be found, it’s that everybody is feeling the pressure in one way or another. Says Stefan Streit, TCL’s chief marketing officer for Europe, “It’s not like somebody is excluded from it. Everybody has to deal with this difficult problem.” Even in the face of some grim predictions for the global smartphone market, Streit strikes a determined tone. “We have to take the challenge on.”
