Realme Will Try to Absorb Increased Cost of Components Ahead of Upcoming Product Launches, Executive Says

Smartphone storage component prices have been rising, according to recent reports. Amidst concerns that original equipment manufacturers (OEMs) could start increasing prices of their devices, a senior Realme executive has revealed that the company will try to absorb the increased cost of components. The revelation comes ahead of Realme's plans to launch new products, including the Realme GT 8 Pro, which was recently unveiled in China. The industry is seeing an increased demand for memory components for artificial intelligence (AI) processing and cloud infrastructure.

Smartphone Prices Could Rise Across Various Segments

In an article published on X (formerly Twitter), Realme's Head of Product Marketing, Francis Wong, writes that storage and memory components are getting more expensive. However, the Chinese smartphone maker plans to absorb these price shocks by diversifying its component supplier portfolio and optimising product design, while improving supply-chain coordination. Wong also said that the company would try not to transfer the price pressures onto consumers, so that its two products, lined up to launch later this year, are not impacted.

Moreover, the Realme executive said that whether a tech firm is selling a premium handset or a mid-range phone, the price pinch is felt across segments. He mentioned four drivers behind components getting more expensive, including accelerated demand due to AI adoption, changing manufacturing priorities, trade policy shifts, and higher dependency on local manufacturing.

Wong said that generative AI, cloud infrastructure, and advanced computing have increased the demand for memory devices. As the supply of the same has not been able to keep up with the demand, it has created a shortage for smartphone makers like Realme. On top of this, OEMs producing NAND Flash, DRAM, and SSDs have redirected their focus on developing high-bandwidth memory (HBM) for AI applications.

Additionally, the global supply chain networks have been disrupted because of shifts in trade policies and technology restrictions. Companies like Apple have been attempting to expand their manufacturing base, moving a substantial portion of their production lines to India. However, manufacturing in India has its own set of problems. The Realme executive pointed out that, while it is a “Make in India brand”, various critical components like NAND and DRAM have to be imported, making them susceptible to global price changes.