Africa's dominant mobile phone leader is showing signs of strain. Transsion Holdings recently forecasted that 2025 will bring declines in both revenue and net profit, with net profit directly halving, marking the poorest performance since the company's listing.

Expert analysis points to multiple reasons behind Transsion's disappointing results. One is the official reason cited by Transsion: rising memory prices impacting costs and gross margins. Data shows that the average selling price of Transsion phones overall is merely 332.1 yuan, with feature phones averaging only 50.1 yuan. Price increases in memory components hit manufacturers focused on the low-to-mid-range market the hardest.

Secondly, intensified competition in key markets like Africa and South Asia is squeezing Transsion's market share. In the third quarter of 2025, although Transsion maintained the top market share position, competitors Xiaomi and Honor achieved growth rates of 34% and 158% respectively, surpassing Transsion's growth pace.

To hedge risks, Transsion is also venturing into new business areas such as mobility solutions and energy storage. However, mobile phone business still constitutes a dominant 90% of Transsion's revenue, indicating that new ventures are far from becoming a reliable second growth engine.

Profits Halved, the Worst Annual Performance on Record Recently, Transsion Holdings released its 2025 performance forecast, presenting a bleak financial outlook.

The announcement indicates that, based on preliminary calculations by the finance department, Transsion Holdings expects 2025 revenue to be approximately 65.568 billion yuan, a decrease of about 3.147 billion yuan compared to the previous year, representing a year-on-year decline of roughly 4.58%. The company anticipates a 2025 net profit attributable to shareholders of approximately 2.546 billion yuan, a reduction of about 3.003 billion yuan from the prior year, equating to a significant year-on-year plunge of about 54.11%.

Analysis reveals that since its listing on the STAR Market in 2019, Transsion Holdings had maintained relatively fast performance growth for many years, with a simultaneous decline in revenue and net profit occurring previously only in 2022.

At that time, Transsion attributed the downturn primarily to two factors: firstly, the adverse impact of global macroeconomic conditions leading to weak mobile phone demand and a year-on-year decrease in smartphone shipments, which caused the company's revenue to fall; secondly, increased investment in technological innovation, R&D for products and mobile internet services to enhance user experience and product competitiveness, leading to higher R&D expenses. Concurrently, the company intensified market development and brand promotion efforts, resulting in increased sales expenses.

In 2025, Transsion Holdings once again faces a scenario of declining revenue and net profit, with net profit halving year-on-year, arguably presenting the weakest annual results since its 2019 listing.

In its recent announcement, Transsion explained that the company was affected by supply chain costs, with significant price increases for components like memory impacting product costs and gross margins, leading to an overall decline in gross margin during the reporting period. To address market competition, enhance brand image, and maintain long-term core competitiveness, sales expenses and R&D investment increased during the period. Consequently, on a base of an estimated 4.58% revenue decline, net profit decreased substantially more.

In reality, this downward trend was already evident in the first half of 2025.

According to Transsion's previously released 2025 interim report, the company achieved revenue of 29.077 billion yuan, a 15.86% decrease year-on-year, and a net profit attributable to shareholders of 1.213 billion yuan, a sharp 57.48% drop compared to the same period last year. This indicates that the profit halving situation had already materialized in H1 2025.

Blaming Memory Price Hikes? Not the Sole Factor Based on Transsion's statements, it primarily attributes the performance decline to rising memory prices.

Recently, influenced by AI data centers consuming large volumes of memory chip orders, the global memory market is experiencing a price surge. Data from Counterpoint shows that DRAM and NAND flash prices surged over 40% in Q4 2025. Entering 2026, price increases for Q1 are projected to reach 40%-50%, with a further approximate 20% rise expected in Q2.

Rising memory costs are increasing expenses for phone manufacturers, with some already succumbing to pressure and suspending flagship project development. In January this year, Wan Zhiqiang, CMO of Xingji Meizu Group's China region, stated at a 2026 Meizu fan event that the Meizu 22 Air launch plan had been canceled. He cited memory price hikes as the direct reason, noting that the surge since Q4 2025 not only affected overall device costs but also delivered a massive blow to the original business plan.

Liang Zhenpeng, a senior industrial economy observer, analyzed that multiple factors influenced Transsion's 2025 performance decline. Firstly, weak growth in the global mobile phone market, particularly soft consumer demand in emerging markets. Counterpoint's "2025 Global Smartphone Market Report" indicates global smartphone shipments grew only 2% in 2025, a slower pace compared to 2024.

Tarun Pathak, Research Director at Counterpoint, stated that memory shortages and rising component costs are beginning to trigger smartphone price increases, leading the firm to lower its 2026 global shipment forecast by 3%. He noted that Apple and Samsung, with stronger supply chain capabilities and premium market positioning, are likely to remain resilient, while Chinese OEMs focused on lower price segments will face greater pressure.

Secondly, competition is intensifying in key markets like Africa and South Asia, with manufacturers like Xiaomi increasing channel and product investments, squeezing Transsion's share. Omdia's Q3 2025 African smartphone shipment data showed Transsion still leading in market share with 25% growth; however, other Chinese manufacturers like Xiaomi, OPPO, and Honor are also bolstering their presence in Africa, with Xiaomi and Honor achieving growth rates of 34% and 158% respectively.

Thirdly, the company itself faces rising costs, currency exchange fluctuations, and inventory pressures, while its push towards premiumization has yet to achieve scale and provide substantial support. Data shows Transsion's phone ASP was only 332.1 yuan in H1 2025, with feature phones averaging a mere 50.1 yuan. Overall, Transsion relies mainly on mid-to-low-end products in Africa; although it is increasing investment in mid-to-high-end segments, this strategy requires more time to bear fruit.

Diversification Efforts? Momentum Weak, Contribution Small Liang Zhenpeng expressed that to confront competition, Transsion needs to consolidate its localized advantages in Africa, deepen its channel and service systems, while simultaneously accelerating technology upgrades and product innovation to seek breakthroughs in the mid-to-high-end market. Furthermore, it could expand into ecosystem businesses like home appliances and digital accessories, and explore new growth markets such as Southeast Asia and Latin America, using a diversified approach to alleviate pressure from the mobile phone business. Long-term success still depends on strengthening R&D and brand value to compete with industry leaders globally.

Transsion is indeed attempting diversification in several directions.

Currently, Transsion's portfolio includes mobile phone brands TECNO, itel, and Infinix, alongside digital accessory brand oraimo, home appliance brand Syinix, and after-sales service brand Carlcare. Previous reports indicated that Transsion Holdings has established a Mobility Business Unit to explore related businesses like electric two-wheelers. Insiders suggest Transsion is rapidly rolling out electric two-wheelers across Africa and other developing nations.

Additionally, Transsion's prospectus for its Hong Kong IPO listing disclosed its involvement in energy storage products under two brands: itel Energy, offering cost-effective solutions for mass-market households and small commercial users; and DYQUE Energy, providing high-end, reliable energy storage products for premium households and commercial users.

From late 2025 to the present, Transsion has also posted numerous job openings related to its energy storage division, covering roles such as product manager, test engineer, sales manager, maintenance, and finance.

However, it is noteworthy that the revenue contribution from the mobility and energy storage businesses remains very limited. In its HK IPO prospectus, Transsion categorized IoT, energy storage, and mobility businesses collectively under "IoT products and other revenue." In H1 2025, this segment generated only 2.568 billion yuan in revenue, accounting for a mere 8.8% of total revenue. Furthermore, this IoT product category also includes items like laptops, tablets, and home appliances, implying that the actual revenue share from mobility and energy storage is even lower.

Presently, the mobile phone business still constitutes approximately 90% of Transsion's total revenue. The path for Transsion to effectively counter mobile market pressures and competitive risks through diversification strategies remains long and challenging.