Zhong Guo Jing Ying Bao·2025-11-18 13:19Group 1: Market Outlook - The global consumer electronics market is facing challenges due to rising storage prices, leading to downward adjustments in production and shipment forecasts for smartphones and laptops for 2026, with expected declines of 2% and 2.4% respectively [1] - TrendForce indicates that inflation continues to disrupt consumer market performance, and the strong upward cycle of memory prices is increasing overall production costs, which will force terminal pricing to rise, impacting the consumer market [1][5] - If the imbalance between supply and demand for memory worsens, there is a risk of further downward adjustments in production and shipment forecasts [1] Group 2: Procurement Strategies - Reports suggest that several smartphone manufacturers, including Xiaomi, OPPO, and vivo, have paused storage chip procurement due to rising prices, with some manufacturers having DRAM inventory levels below three weeks [2] - Industry analysts believe that pausing procurement is unlikely as manufacturers would not want to forfeit market share, and instead, they may raise terminal product prices to cover rising component costs [2][3] Group 3: Cost Impact - The price increase of storage chips is expected to raise the overall BOM (Bill of Materials) cost of smartphones by an additional 5% to 7% in the coming year, following an 8% to 10% increase already observed [5][6] - The rising costs have already been reflected in the pricing of new smartphone models, with brands like vivo and OPPO increasing prices compared to previous generations [3][5] Group 4: Financial Performance - Transsion Holdings reported a revenue increase of 22.6% year-on-year in Q3, but its net profit declined by 11.06%, indicating that rising supply chain costs are impacting profitability [6] - Xiaomi's Q3 financial report showed an increase in both revenue and net profit, but also noted a rise in smartphone sales costs due to increased prices of core components [6] Group 5: Market Dynamics - The current market dynamics indicate that high-end smartphones can absorb cost increases better due to higher brand premiums, while mid to low-end models are more sensitive to cost fluctuations [6][7] - The ongoing supply tightness in memory chips is expected to lead to a market reshuffle, favoring larger brands as smaller manufacturers struggle to secure resources [7]