When it comes to affordable flagship phones, consumers will usually judge whether the price offered matches the premium features provided. Among the main criteria are chip performance, camera quality, battery life and the extent to which AI integration can improve the daily experience. Market acceptance, in turn, depends on the perception that the improvements offered are not just small or repetitive but bring clear added value.
Counterpoint's report shows that the affordable flagship segment with prices between $700 (~RM2,825) to $999 (~RM4,031) is now the fastest growing category because it manages to offer advanced features that were previously only available in premium flagship models but at a more affordable price. This segment is also dominated by brands such as Samsung, Xiaomi, Google, Honor, Motorola and Oppo who are increasingly competing to attract the attention of consumers.
However, the increase in memory component prices is a major challenge as memory chip prices jumped by 50% in Q4 2025 and are expected to continue to rise until mid-2026. As a result, the cost of producing premium phones has increased by more than $150 (~RM605) and the selling price has the potential to increase by more than $200 (~RM807) or around 25%.
Although global sales in this segment are expected to grow by 25% in 2025 with the highest growth in the Middle East and Africa, Latin America, Europe and Southeast Asia, consumers are now increasingly price-sensitive. They will only choose products that truly offer a clear and worthwhile upgrade, according to Counterpoint.
Counterpoint also emphasizes that manufacturers actually have an opportunity to show real value to consumers in the affordable flagship phone segment. For example, the Samsung Galaxy S26 comes with a larger battery, increased base storage and more efficient chips but the price has increased by around 10%. The Xiaomi 17, on the other hand, has kept the price the same with minor upgrades to the chip, battery and screen, which gives the impression of a modest upgrade.
Meanwhile, Honor with the 400 series introduced more significant improvements in the camera, battery and AI, which helped boost sales in several regions. In Malaysia in particular, Honor recorded strong growth throughout 2025 to emerge as one of the top manufacturers surpassing Google and Xiaomi and starting to challenge Samsung's position in the segment.
This is also an example of how the rebranding strategy plays a key role as Honor now begins to label the number series as flagship devices, making it more relevant in the affordable premium segment.
The 2026 forecast shows that global phone shipments will fall 12% compared to the previous year, the largest decline in the industry's history. The sub-$100 (~RM403) segment is expected to be hit hard with 1/3 of the market lost while the only hope is the premium segment valued at $700 (~RM2,825) and above, but only if the specifications offered are attractive enough to make consumers feel the higher price is worth it.
