India is witnessing a massive hike in smartphone prices lately, and the data behind those inflated price tags is alarming. Some of India’s top-selling brands, like Vivo, Samsung, Oppo, Realme, Xiaomi and Nothing, have apparently raised prices on the local level by up to 40 per cent, thus making it far trickier for the entry-level Indian consumer to get their hands on new smartphones, even in the budget ranges.
According to industry reports, more than eight brands have increased prices of key models since late 2025, with an average hike of around Rs 1,500 per device. Some cheaper and midrange models have seen even steeper price revisions, especially in the budget and mid-range segments that dominate sales in India.
As a result, consumers are shying away from making quick upgrades. Based on a report from Mint, phone buyers are staying away from investing in new smartphones at the moment, with many willing to get their existing devices repaired to extend their life.
Phones become expensive, thanks to the chip shortage
One of the main triggers for the price hikes is a severe global shortage of memory chips (DRAM and NAND). Semiconductor manufacturers are prioritising production of high-bandwidth memory (HBM) chips for Nvidia’s AI data centres, thus making the chips pricier. Companies like Samsung, Micron, and SK Hynix have shifted their production capacity toward AI applications, leaving conventional memory components in short supply, which is driving up costs dramatically, in some cases by over 50-60%.
The ongoing conflict in West Asia has also disrupted global supply chains, increasing shipping costs, and contributing to broader commodity inflation. While the direct impact of the war on memory chips is debated, analysts say the combination of AI demand and geopolitical instability has created a storm for electronics manufacturers.
“The rise in smartphone prices is driven by strong headwinds emanating from rising AI memory costs, as well as prolonged macro uncertainties triggered by the West Asia crisis. Consumers are increasingly cautious about discretionary upgrades across affordable and value-for-money smartphones. As a result, many users are extending replacement cycles and delaying even planned purchases, translating into visible pressure on annual shipments and market revenues, with little in the near-term outlook to suggest a quick reversal,” says Prabhu Ram, VP-Industry Research Group, CyberMedia Research (CMR).
Several industry experts have described the situation as an “AI tax” on consumer devices. Memory chips now cost significantly more, forcing brands to either pass on the hike to customers or absorb losses, which are eventually unsustainable in a highly competitive market.
“We are seeing early signs of demand softening at the mass-market level, with brands becoming more cautious, tightening inventory, working closely with retailers on targeted schemes, offering selective margin support, and increasingly relying on in-store promoters to convert walk-ins in a tougher demand environment,” says Tarun Pathak, Research Director, Counterpoint Research.
“Macroeconomic headwinds are from the depreciating Rupee and conflict in West Asia. If it still lasts one month or more, there could be another round of cuts (in projections) because consumer sentiments (purchase) have started going down from March onwards,” he added.
Price situation not getting any better
The effects of the industry is likely to affect the overall prices in the smartphone segment for the years to come. “We are also hearing that Q2 (April-June) will be like a very, very tough quarter for most of these brands, and we are not seeing signs of recovery anytime soon. Maybe in Q4 or even later, because the memory (shortage) situation has been there for at least one and a half years. We are also hearing that Q2 (April-June) will be like a very, very tough quarter for most of these brands, and we are not seeing signs of recovery anytime soon. Maybe in Q4 or even later because the memory (shortage) situation is there for at least one and a half years,” stated Pathak.
Consumers seem to be unhappy
Many households are prioritising essential expenses like cooking gas and groceries amid inflationary pressures, leading to delayed purchases and softer demand. Early data for 2026 already shows smartphone sales declining by around 9% year-on-year in the first nine weeks.
While this could affect budget-conscious buyers the hardest, it is likely to benefit premium brands like Apple and high-end Samsung models that are better positioned to absorb costs. Apple’s latest iPhone 17 has been positioned to deliver the least impact of the price hike in the supply chain, giving interested buyers a reason to consider it over rival offerings. The same goes for Samsung’s recently announced Galaxy S26 series, which has been priced competitively to draw customers from Chinese brands.
As for entry-level devices, the price hikes are expected to affect all brands, with consumers potentially seeking to extend their existing smartphone’s life. The used market is also expected to catch momentum.