Recently, Transsion Holdings, the “King of African Mobile Phones”, disclosed its 2025 annual performance forecast. Data shows that Transsion Holdings is expected to achieve a net profit attributable to its parent company of approximately 2.546 billion yuan in 2025, a year-on-year decrease of 54.11%. The revenue side is also weak, and is expected to achieve approximately 65.568 billion yuan, a year-on-year decrease of 4.58%. This is the first time that Transsion’s annual net profit has been cut in half since its listing in 2019.

For this Chinese company that once eclipsed Samsung and Apple in the African market, 2025 is undoubtedly the "darkest moment." In the announcement, Transsion pointed the finger of the performance avalanche at the supply chain - affected by the sharp increase in the price of storage and other components, product costs have increased and gross profit margins have been under pressure.

Pure "cost theory" seems difficult to explain the decisiveness of the capital market. Since the high point in 2024, Transsion Holdings' share price has fallen from about 120 yuan to around 58 yuan, and its market value has evaporated by more than 70 billion yuan. The flight of capital reflects a deeper panic: in addition to the impact of the skyrocketing prices of memory chips, the "encirclement and suppression" of Xiaomi, Honor and other competitors in Africa are also disintegrating the moat on which Transsion relies on for its survival.

When the upstream capital choked the throat and the downstream opponents disturbed the foundation, the "King of Africa" ​​was pushed to the edge of the cliff.

01

Storage price increase pressure

The rising price of memory chips has turned into a hurricane sweeping the global electronics industry chain.

Around the Lunar New Year in 2026, electronic component distributors in Shenzhen Huaqiangbei were experiencing madness. In one week, the price of a 1TB solid-state drive rose from 600 yuan to 900 yuan to 950 yuan to 1,100 yuan. For downstream assembly plants, the BOM (bill of materials) cost of a basic office computer has soared from 3,000 yuan to 5,000 yuan in just a few months.

Price jumps at the micro level correspond to supply and demand imbalances in the macro market. Counterpoint data shows that in the fourth quarter of 2025, DRAM and NAND Flash contract prices soared by more than 40%. In the first quarter of 2026, the increase will intensify, and the increase is expected to remain at a high of 40% to 50%.

The core driver of this “storage super cycle” price increase is the explosive construction of AI data centers. Storage giants such as Micron Technology and Western Digital (SanDisk's parent company) have made a lot of money as a result, and their stock prices have recorded astonishing gains in the short term. However, it is a disaster for mobile phone manufacturers that are downstream in the industry chain and lack bargaining power.

Industry giant Qualcomm is also feeling the chill. On February 4, 2026, Qualcomm released a financial report showing that although revenue in the first quarter hit a new high, its guidance for the second quarter was lower than expected. Qualcomm CEO Anmon said bluntly: "We are beginning to see that memory will determine the size of the mobile market." Due to memory shortages and soaring costs, some customers are unable to obtain full quotas, and it is even difficult to mass-produce complete products. Xingji Meizu Group China CEO Wan Zhiqiang even publicly revealed that Meizu 22 Air has regrettably been canceled due to the sharp increase in memory impacting business plans.

For Transsion Holdings, the price increase is a "dimensionality reduction blow." The reason lies in Transsion’s unique product structure. According to data from CICC, the average price of Transsion smartphones in 2023 will be 542 yuan, and the average price of feature phones will be as low as 58 yuan. This extremely low-price strategy means that Transsion is extremely sensitive to fluctuations in BOM costs.

According to UBS's in-depth dismantling report, memory chips account for a huge proportion of the cost structure of mid- to low-end mobile phones. In 2024, this proportion will be about 22%. By 2026, the memory cost proportion in the BOM of mid-to-low-end mobile phones is expected to soar to 34%.

For an iPhone priced at 8,000 yuan, if the storage cost increases by 100 yuan, it may just make less money for a cup of coffee, or it may squeeze competing products by maintaining the original price. But for a Transsion mobile phone priced at 500 yuan, the storage cost has increased by 50 yuan, which means that the profit red line has been directly penetrated.

UBS's calculation model shows that in order to hedge against this wave of cost increases, flagship high-end mobile phones only need to increase their prices by 7% to maintain gross profit margins, while mid- and low-end mobile phones need to increase their prices by 17%. In extremely price-sensitive markets such as Africa and South Asia, raising prices by 17% is tantamount to suicide. Consumers will not hesitate to turn to the second-hand mobile phone market or extend the replacement cycle.

Therefore, Transsion is in a deadlock: if it doesn't increase the price, it will lose money on each unit sold, and its net profit will be cut in half; if the price increases, its market share will be swallowed up instantly.

The financial report truly reflects this dilemma. In 2025, Transsion Holdings' revenue fell by 4.58%, which seemed to be a small decline, but its net profit plummeted by 54.11%. This deviation of "slight revenue decline and profit avalanche", due to the lack of profit buffer from high-end product lines, Transsion can only use its own flesh and blood to fill the hole of upstream price increases. In the third quarter of 2025, Transsion's gross profit margin has dropped to 18.59%, a new low in the past five years. As high-priced inventory continues to be consumed, the financial report data in the first quarter of 2026 may become even more ugly.

02

Xiaomi Honor "Besieged"

The encirclement and suppression by our Chinese counterparts is a "man-made disaster" that Transsion cannot avoid.

Once upon a time, Transsion was a model of "choice is greater than effort". Founder Zhu Zhaojiang keenly avoided the red ocean of the domestic mobile phone market and plunged into the African continent, which was ignored by Samsung and Apple. With a series of localized micro-innovations such as “four SIM cards and four standbys”, “dark skin beautification algorithm”, and “subwoofer loudspeaker”, TRANSSION has built a seemingly indestructible fortress in Africa.

There is no permanent safe haven in the business world. When the domestic market hits its ceiling and global consumer electronics growth stagnates, Africa, the “last billion-level demographic dividend market,” instantly changes from a blue ocean to a red ocean.

Xiaomi and Honor are here.

Lei Jun made a high-profile announcement at the China-Africa Entrepreneurs Conference in 2024 to increase investment in Africa, and frantically laid out directly-operated stores and billboards in core markets such as Nigeria and Kenya. Honor has adopted a more radical approach, using 5G products to create a gap in the hinterland of Transsion through deep binding with local operators.

Data doesn't lie. According to statistics from Canalys and Omdia, although Transsion will still occupy the first place in Africa with a share of about 51% in 2025, its dominance is visibly loosening. In the third quarter of 2025, Transsion's shipment growth was only about 10%, while Xiaomi's growth rate reached 34% during the same period, and Honor achieved an astonishing growth rate of 158% by virtue of the low base effect.

The upgrading of the competition dimension also affects the development of Transsion. Transsion relied on "information gaps" and "channel sinking" to survive in the past. It relied on hundreds of thousands of "wall-painting" advertisements and mom-and-pop shops densely packed in the streets of Africa to establish physical isolation. However, with the popularity of mobile Internet in Africa and the higher-dimensional playing methods brought by Xiaomi and OV, this line of defense is failing.

Taking product strength as an example, Xiaomi's Redmi digital series has introduced higher-quality screens and faster charging technology in the same price range, directly impacting Transsion's product logic of "just enough is enough". For the younger generation of African consumers, Transsion's feature phone thinking will seem outdated after they experience smoother systems and stronger performance.

From a global perspective, Transsion’s situation is even more embarrassing. In 2025, in the global smartphone shipment rankings, Transsion has been overtaken by vivo and OPPO, falling out of the top five. This means that Transsion’s status is declining in the competition for the right to speak in the supply chain. When there is a shortage of memory chips, suppliers will naturally give priority to the world's top five manufacturers with larger purchase volumes and the ability to pay higher premiums.

Facing the encirclement and suppression, Transsion did not fail to save itself. The company tried to tell a new story of "AI" and "premiumization". In its 2025 prospectus and roadshows, Transsion frequently mentioned AI layout, claiming to be connected to Google Gemini and Alibaba Cloud Tongyi Qianwen, and launching functions such as "one-click screen inquiry" and "AI writing". However, in the eyes of hard-core technology media and analysts, these are more like "API shells" packaged for listing.

Compared with the full-stack self-research of Huawei Pangu, Honor MagicOS, and vivo Blue Heart large models, from the underlying chip to the operating system to the application layer, Transsion Holdings’ AI research and development appears to be weak. Although Transsion's R&D expenses increased to 2.139 billion yuan in the first three quarters of 2025, this figure was only one-tenth of Xiaomi's R&D investment in the same period (approximately 23.5 billion yuan). In the AI ​​arms race for computing power and funding, Transsion’s ammunition arsenal is not abundant.

The so-called "second curve" - ​​home appliances, accessories, and energy storage businesses have not yet taken off. The financial report shows that in the first half of 2025, "other businesses" revenue, including loudspeakers, energy storage, etc., accounted for less than 10%.

Under a double attack, the capital market chose to vote with its feet. The halving of the stock price is not only a reaction to the current performance, but also questions the future growth logic of Transsion. In the past, investors valued Transsion’s stable cash flow from its monopoly in Africa. Now, the monopoly has been broken, cash flow has been swallowed up by storage costs, and the high-growth story has come to an abrupt end.