Rising Chipset Costs Force Smartphone Brands to Adjust Strategies in India
Smartphone brands rethink India strategy as storage chip costs soar
Deccan Herald
Image: Deccan Herald
India's smartphone market faces challenges as rising storage chip prices lead to a significant decline in shipments, particularly in the budget segment. Major brands are adjusting their strategies, with some opting for cost-cutting measures while others, like Apple, are managing costs differently. The trend of increasing smartphone prices is expected to continue.
- 01Smartphone shipments in India's entry-level segment dropped by 59% year-on-year in Q1 2026 due to a shortage of storage chipsets.
- 02The cost of storage and RAM components for smartphones surged from ₹2,000 to ₹11,500, nearly a 500% increase.
- 03Many smartphone models launched in early 2026 are priced 14-15% higher than their predecessors, with recent price hikes between ₹5,000-12,000.
- 04Apple has mitigated cost increases by raising base storage capacities instead of sharply raising retail prices.
- 05Experts predict that the chipset supply crunch may not ease until the second half of 2027, maintaining high prices for smartphones.
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India, the second-largest smartphone market, is experiencing significant challenges as rising storage chip prices lead to a 59% decline in shipments within the entry-level segment in the first quarter of 2026. Major brands like Vivo, OnePlus, and Apple have reported shipment declines, while others like Oppo and Xiaomi have shown growth. The surge in memory chip prices, attributed to increased demand from AI data centers, has forced manufacturers to raise smartphone prices significantly. For instance, the cost of storage and RAM components has risen from ₹2,000 to ₹11,500, impacting overall production costs. As a result, new smartphone models are priced 14-15% higher than their predecessors, with recent hikes ranging from ₹5,000-12,000. Companies are also resorting to cost-cutting measures, including using older chipsets and reducing camera sensors. While Apple has managed to offset some costs by increasing base storage, the overall trend indicates that high prices may persist until at least the second half of 2027.
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The rising costs of storage chips are leading to higher smartphone prices, affecting consumer purchasing decisions.
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