Realme, Oppo merge as parent company BBK Electronics cuts costs

Realme announced plans Wednesday to bring one of its brands under another as the mobile phone industry braces for higher prices and weaker sales next year.The major Chinese smartphone manufacturer, which sells its phones across India, Southeast Asia and Europe, will now operate as part of Oppo, the company as reported by Reuters. Both brands belong to BBK Electronics, a large Chinese technology firm that also controls the Vivo phone brand.The decision comes as phone makers around the world look for ways to save money and work more efficiently. Companies are facing mounting expenses and tougher competition, leading many to combine operations where possible.A key problem facing the industry is a shortage of memory chips, according to research firm Counterpoint Research. The firm said that demand for these chips from companies building artificial intelligence systems is creating supply problems that will hit smartphone makers hard.Counterpoint now expects phone shipments worldwide to drop 2.1% in 2026. That marks a sharp change from its earlier prediction of steady or slightly growing shipments. These shipment numbers track how many phones are sent to stores and other sellers, serving as a gauge of market demand rather than final sales to customers.At the same time, the typical price of a smartphone could jump 6.9% next year compared to 2025, Counterpoint said. The firm had previously thought prices would rise just 3.6%.The price surge stems from specific shortages and supply chain problems in the chip industry, which are driving up the cost of parts. Global expansion of data centers has created huge demand for equipment made by Nvidia, which uses components from SK Hynix and Samsung. These two companies are the world’s largest makers of memory chips.DRAM costs hitting smartphones hardA particular type of memory chip called DRAM is causing headaches. While DRAM is essential for AI data centers, it also plays a critical role in smartphones. Prices for DRAM have climbed sharply this year as buyers compete for limited supplies.For cheaper phones priced under $200, the cost to make each device has risen 20% to 30% since January, Counterpoint found. Phones in the middle and upper price ranges have seen their production costs climb 10% to 15%.The research firm warned that memory prices might surge another 40% through the second quarter of 2026. That would push manufacturing costs up an additional 8% to 15% beyond current levels, which are already high.Phone makers will likely pass these higher costs along to shoppers, driving up retail prices. MS Hwang, a research director at Counterpoint, said Apple and Samsung are in the strongest position to handle the coming months.“But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins,” Hwang stated. He noted Chinese phone makers operating in the middle and lower price segments would face particular difficulties.Manufacturers may cut corners on componentsCounterpoint suggested some manufacturers might cut corners by using lower-quality cameras, screens or speakers. Others may reuse older parts from previous models. Companies will also probably push customers toward their more expensive phone models.BBK Electronics, which owns Oppo, Vivo and Realme, faces growing challenges from both Apple and Huawei. This makes cost-cutting through brand consolidation more urgent.As reported by Cryptopolitan in July 2025, Huawei had recaptured the leading position in China’s smartphone market during the second quarter. The technology market analyst firm Canalys reported that Huawei shipped 12.2 million phones in China between April and June, marking a 15% increase from the same period last year. That gave Huawei 18% of the Chinese market, making it the top seller for the first time since early 2024.Apple also posted positive results in China, shipping 10.1 million phones during the quarter. That represented 4% growth and placed Apple in fifth position. The numbers marked Apple’s first sales increase in China since the final three months of 2023, according to Canalys. If you're reading this, you’re already ahead. Stay there with our newsletter.