Rising component costs set to squeeze budget smartphone prices in 2026

Southeast Asia’s smartphone shipments reached 100 million units in 2025, representing a 1 per cent year-on-year decline, as softer performance in the first three quarters weighed on the overall market, according to market analysts Omdia.

However, the region returned to growth in 4Q25, with shipments rising 2 per cent year-on-year to 25.8 million units, reversing three consecutive quarters of contraction and signalling improved momentum toward year-end.

Samsung led the Southeast Asia smartphone market in 2025, increasing shipments by 5 per cent to 17.9 million units and expanding its market share to 18 per cent.

Samsung also topped the market in 4Q25, shipping 4.2 million units to secure a 17 per cent share, representing a 19 per cent year-on-year increase in quarterly volume.

The strong finish was supported by the successful rollout of the Galaxy A17 series, which delivered meaningful specification upgrades over the Galaxy A16 and reinforced Samsung’s competitiveness in the affordable segment.

Xiaomi recorded the second-highest shipment volume for the full year, with shipments rising 4 per cent to 17.0 million units, lifting its share to 17 per cent.

In 4Q25, Xiaomi shipped 3.9 million units, placing third for the quarter with a 15 per cent share, as a greater proportion of new portfolio launches had already shipped in 3Q25.

TRANSSION was third in full-year shipment volume, despite shipments declining 8 per cent to 16.3 million units, with share easing to 16 per cent.

In 4Q25, TRANSSION accounted for 3.5 million units, the fourth-largest shipment total for the quarter, reflecting a 25 per cent year-on-year decline as shipment corrections played out across major markets following aggressive expansion over the previous two years.

OPPO accounted for the fourth-largest shipment volume in 2025, shipping 14.7 million units, a 16 per cent year-on-year decline, with a market share of 15 per cent.

In 4Q25, OPPO delivered the second-highest quarterly shipment total at 4.1 million units, capturing a 16 per cent share and growing 4 per cent year-on-year, supported by the Reno 15 series and updates to its A-series portfolio.

vivo completed the top five for the year, with shipments declining 6 per cent to 11.9 million units, maintaining a 12 per cent share.

In 4Q25, vivo shipped 3.4 million units, representing a 13 per cent share and a 7 per cent year-on-year decline.

While annual volumes softened, vivo increased average selling price by 11 per cent, reflecting a greater emphasis on higher-value devices.

“Amid rising cost pressures, brands are increasingly adopting channel-centric strategies to safeguard margins,” explained Research Manager Chiew Le Xuan.

“According to Omdia’s monthly tracker, POCO recorded its highest-ever monthly shipments in November, with its contribution reaching an all-time high of 21 per cent, driven by strong 11.11 promotional sales momentum,” she continued.

She pointed out that while the launch of the entry-level POCO C71 weighed on overall average selling prices, it played a critical role in sustaining volumes.

She added that this drove POCO shipments up by double digits in 4Q25, helping to cushion cost pressures in the entry segment.

“As an online-exclusive brand, POCO’s expansion into entry-tier devices also proved financially accretive, complementing Xiaomi’s new retail strategy,” she remarked.

“More broadly, vendor performance across Southeast Asia continues to be shaped by country-specific dynamics, with growth increasingly dependent on effective portfolio localisation,” Chiew observed.

“One notable example is HONOR its total shipments doubled YoY in 2025, supported by strong growth across key markets including the Philippines, Singapore, Thailand and Vietnam,” she said.

She stressed that this growth was underpinned by a targeted portfolio strategy.

“Higher-spec models such as the X9d and telco-focused devices like the 400 Smart gained traction in Malaysia, while more affordable models such as the X6c performed well in more price-sensitive markets like the Philippines,” she added.

“Vendors closed 2025 with a cautious outlook for 2026, as rising memory and storage costs are set to become a more meaningful constraint on product strategy,” stated Sheng Win Chow, Senior Analyst at Omdia.

He highlighted that memory and storage already account for more than 30 per cent of the bill of materials for smartphones priced below US$200.

He warned that with over 60 per cent of devices shipped in Southeast Asia falling into this segment, cost inflation raises fundamental questions around pricing, specifications and portfolio positioning next year.

“While the full impact of higher memory pricing will emerge gradually, it is expected to become more visible from mid-2026 as increased component costs flow through to device manufacturing costs,” he cautioned.

He added that early signals are already evident, with recent launches such as Samsung’s Galaxy A07 5G and Xiaomi’s Redmi Note 15 series priced higher than their predecessors, pointing to the direction of travel for future launches.

“At the same time, rising costs reduce vendors’ ability to absorb pricing pressure through margin support, weakening traditional volume-driven levers such as back-end rebates and inventory loading,” he said.

He argued that this makes aggressive channel stuffing followed by rebate-led stock clearance less sustainable.

“As a result, vendors are increasingly required to engage channels through healthier, value-led models focusing on product differentiation, portfolio mix optimisation and sell-out quality rather than relying purely on volume economics,” he concluded.