CHINA SMARTPHONE SALES DROP 13% AS BRANDS RAISE PRICES

The June shopping event, China's second-largest annual sales period after Singles' Day, revealed weakness in the smartphone market as brands struggled with component cost pressures. Broadly, the 13% decline reflects a challenging market environment where price hikes failed to drive consumer demand. Honor was hit hardest with a 33% sales drop, while Xiaomi faced a 24% decline during the festival period. Manufacturers implemented price increases to protect margins as memory chip costs remained elevated. The strategy backfired as consumers pulled back on purchases, suggesting price sensitivity remains high in China's competitive smartphone market. The weak 618 performance adds to concerns about smartphone demand in the world's largest market by unit volume. Brands face a delicate balancing act: raising prices to offset costs risks alienating price-conscious buyers, while absorbing costs pressures margins.