Why budget phones are disappearing just when they are needed most
Reporters and visitors gather outside Chinese tech company Xiaomi’s first official physical store in Korea, temporarily open at the IFC Mall in Yeouido, Seoul, June 25, 2025. Korea Times photo by Kim Jin-ook
Inflation has thinned consumers’ wallets, yet budget and midrange smartphones are losing ground just when buyers need affordable options most.
Soaring component costs, particularly for memory chips, are making it harder for manufacturers to sustain a low-margin, high-volume business model. As manufacturers focus on expanding their premium foldable phone lineups, consumers are increasingly turning to repairs and secondhand devices.
Apple’s entry-level iPhone 17e. Its price rose from 990,000 won ($726) to 1.15 million won Thursday. Captured from Apple webpage
iPhone 17e surpasses 1 million won
Rising prices for budget and midrange smartphones are putting further pressure on consumers.
According to smartphone industry observers Monday, Apple raised the price of its entry-level iPhone 17e, released in March, by 16.1 percent on Thursday, from 990,000 won ($726) to 1.15 million won. The company repriced the existing model as it launched its new iPhone 18 series at substantially higher prices amid so-called “chipflation” driven by global chip shortages.
Samsung Electronics has also raised prices for its entry-level Galaxy A series. The Galaxy A37, released in Korea in June, costs 598,400 won, up 19.8 percent from last year’s A36.
Budget and midrange phones are losing ground as rising prices squeeze their particularly price-sensitive buyers. In an Aug. 26 forecast, market research firm IDC projected that memory shortages would push the average selling price of smartphones up 27.6 percent this year, while shipments would fall 16.7 percent.
“Android players focused on low-end devices, which were already operating on razor-thin margins, are cutting low-end models and pushing a higher-end product mix,” IDC said.
Chinese manufacturers of low-end smartphones are bearing the brunt of the downturn. According to market research firm Counterpoint Research, Xiaomi’s smartphone shipments fell 26 percent in the second quarter from a year earlier, while Vivo’s dropped 21 percent over the same period.
Manufacturers bet on foldables as consumers turn to repairs
Faced with a shrinking market, manufacturers are looking to foldable smartphones to reverse their fortunes. IDC described foldables as the market’s only hope, projecting growth of 12.6 percent this year.
More manufacturers are shifting their attention to premium lineups, where demand is less sensitive to price increases. Apple and Huawei have joined the race to develop passport-style foldable phones alongside Samsung Electronics. Vivo, Oppo and Motorola are also expected to enter the fray. Huawei recently released a successor to its first tri-fold phone, unveiled in 2024.
The repair and secondhand markets are also expected to grow as consumers seek more affordable options. That demand is helping cushion the impact of weaker handset sales on display shipments, as more people choose to repair broken screens rather than buy new phones.
Market research firm TrendForce forecast on Aug. 31 that global smartphone panel shipments would decline just 2.5 percent this year.
“Sustained demand from the secondary and repair markets is supporting stronger-than-expected smartphone panel demand,” the firm said.
This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by a generative AI system and edited by The Korea Times.