It all depends on how big the unit of work, but I guess you're trying to treat each <product/> nodes in succession.

For that, the simplest way would be to use XMLReader to get to each node, then use SimpleXML to access them. This way, you keep the memory usage low because you're treating one node at a time and you still leverage SimpleXML's ease of use. For instance:

$z = new XMLReader;
$z->open('data.xml');

$doc = new DOMDocument;

// move to the first <product /> node
while ($z->read() && $z->name !== 'product');

// now that we're at the right depth, hop to the next <product/> until the end of the tree
while ($z->name === 'product')
{
    // either one should work
    //$node = new SimpleXMLElement($z->readOuterXML());
    $node = simplexml_import_dom($doc->importNode($z->expand(), true));

    // now you can use $node without going insane about parsing
    var_dump($node->element_1);

    // go to next <product />
    $z->next('product');
}

Quick overview of pros and cons of different approaches:

XMLReader only

• Pros: fast, uses little memory

• Cons: excessively hard to write and debug, requires lots of userland code to do anything useful. Userland code is slow and prone to error. Plus, it leaves you with more lines of code to maintain

XMLReader + SimpleXML

• Pros: doesn't use much memory (only the memory needed to process one node) and SimpleXML is, as the name implies, really easy to use.

• Cons: creating a SimpleXMLElement object for each node is not very fast. You really have to benchmark it to understand whether it's a problem for you. Even a modest machine would be able to process a thousand nodes per second, though.

XMLReader + DOM

• Pros: uses about as much memory as SimpleXML, and XMLReader::expand() is faster than creating a new SimpleXMLElement. I wish it was possible to use simplexml_import_dom() but it doesn't seem to work in that case

• Cons: DOM is annoying to work with. It's halfway between XMLReader and SimpleXML. Not as complicated and awkward as XMLReader, but light years away from working with SimpleXML.

My advice: write a prototype with SimpleXML, see if it works for you. If performance is paramount, try DOM. Stay as far away from XMLReader as possible. Remember that the more code you write, the higher the possibility of you introducing bugs or introducing performance regressions.