(SINGAPORE 03.03.2026) China has at least 15 well-known domestic smartphone brands, and vivo has usually been among the top sellers. But ever since it hit number one in 2021, vivo has been on a steady decline. Shipments have fallen from 71 million to 46.1 million—a drop of 35%.
By comparison, the entire Chinese smartphone market only shrank 13% over the same period, from 329 million to 286 million units. Vivo’s problem is not bad luck—it is its strategies. According to a column by Qiushuibitan (秋水笔谈) on 36Kr, a Chinese online media focused on technology, vivo’s leadership made choices that left the company with no real differentiation, a weak core market, and a future built more on hype than on technology.
“This decline is the result of vivo’s poor strategies, now exacerbated by an external, industry-wide shock,” the column remarked.
The shock comes from the AI boom. AI companies are buying huge amounts of advanced memory chips for their servers. Companies like Samsung and SK Hynix are dedicating most of their cutting-edge chip production to AI, leaving less for smartphones, PCs, and other devices. This caused phone memory prices to jump by 300%, turning the industry’s cost structure upside down.
Still, this is not the root cause of vivo’s decline—it just exposed the weakness in its strategies. A company with strong tech and a balanced product line could survive this storm. Vivo, however, is vulnerable.
Vivo’s core strategy was all about value for customers: offering them “about 70% of the high-end experience at 40% of the price” in the 2,000 to 3,500 yuan mid-range (around S$368–S$460). This relied on cheap access to last year’s flagship chips and plenty of memory. With memory prices soaring, that strategy no longer works. By focusing almost entirely on this price tier, vivo set itself up for maximum risk.
The company is also heavily reliant on low- to mid-end phones. About 81.5% of vivo phones sell for under 4,000 yuan, and 55.1% under 2,000 yuan. When memory prices spiked, this segment became the most vulnerable. Vivo now faces a tough choice: raise prices and lose customers, or cut specs and damage the user experience.
Meanwhile, attempts to move upmarket have failed. In the first half of 2025, vivo was barely visible in the US$600+ (≈S$765) segment, due to underinvestment in core tech. Launching dozens of phones in a single year stretched its R&D resources thin, leaving them behind in chips, motherboards, and systems. Without real tech advantages, they cannot command premium prices.
Vivo tried to make a big bet on India. Volume market share looks good, but revenue share actually fell. Worse, the joint venture structure, where a local partner holds 51%, means a lot of potential profit is lost. This is not growth—it is a dead-end strategy.
In response, vivo replaced founder Shen Wei (沈炜) with tech executive Hu Baishan (胡柏山). The new focus? MR (mixed reality) glasses and humanoid robots. But according to Qiushuibitan, this is just chasing the next shiny thing while ignoring the core problems: lack of innovation, quality issues, and a damaged brand. The new spaces are years from profitability and require massive R&D investment.
Vivo’s cameras, once a key differentiator, are suffering from quality issues, and its designs mimic competitors. If it cannot transform from a marketing company into a true tech company, 2026 could be remembered as the point when its long decline became irreversible.
The challenges facing vivo reflect a broader trend in China. Hong Kong’s Counterpoint Research reports that smartphone sales fell 23% year-on-year in January 2026, with domestic brands hit hardest. Apple was the only major player to see growth. Factors include misaligned Chinese New Year timing this year which fell outside the government subsidy period, weaker subsidies, rising memory chip costs, and longer smartphone replacement cycles among customers. Phones above US$600 are expected to capture 35.9% of the market in 2026, up 5.4 points from last year.
DRAM and NAND prices surged 33–60% in first quarter of 2026, as suppliers prioritize AI servers over consumer devices. This squeezes profits for mid- and low-end phones. Transsion (传音) saw revenue fall slightly, but profits dropped 54% in 2025 due to rising memory costs. Meizu’s (魅族) business has stalled.
Chinese brands are responding to the trends by raising prices and exploring new markets. Xiaomi is expanding into IoT and automotive; OPPO, vivo, and Honor (荣耀) are testing devices like handheld gimbal cameras. Edge-side AI assistants, like the Nubia M153 Doubao (努比亚 M153 斗宝), offer features such as voice-activated photo editing and shopping. These AI assistants run directly on the device called the edge instead of relying solely on the cloud.
2026 is shaping up as a year of clear differentiation. High-end brands like Apple and Huawei benefit from scale and supply-chain advantages. Mid- and low-end brands must innovate, raise prices, or diversify to survive. Edge AI could spark the next wave of smartphone upgrades.
