{"id":3491032,"date":"2026-07-17T20:09:27","date_gmt":"2026-07-17T20:09:27","guid":{"rendered":"https:\/\/techingeek.com\/index.php\/2026\/07\/17\/ai-powered-memory-shortage-shakes-up-indias-smartphone-industry\/"},"modified":"2026-07-17T20:09:27","modified_gmt":"2026-07-17T20:09:27","slug":"ai-powered-memory-shortage-shakes-up-indias-smartphone-industry","status":"publish","type":"post","link":"https:\/\/techingeek.com\/index.php\/2026\/07\/17\/ai-powered-memory-shortage-shakes-up-indias-smartphone-industry\/","title":{"rendered":"AI-powered memory shortage shakes up India\u2019s smartphone industry"},"content":{"rendered":"
<\/div>\n
\n

Following warnings from analysts about the impact of AI-driven demand for memory chips on consumer electronics, India is showcasing the most compelling evidence of this change, with increasing handset prices altering the smartphone landscape.<\/p>\n

The memory chips involved \u2014 RAM and storage elements \u2014 are the exact components that technology giants require in huge quantities to construct AI data centers. Companies like Samsung, SK Hynix, and Micron have been reallocating production capacity towards high-bandwidth memory, the specialized chips utilized in AI accelerators, as they yield significantly higher profits per wafer compared to the standard memory found in smartphones and laptops \u2014 resulting in reduced capacity and elevated costs for regular consumer electronics.<\/p>\n

India, the second-largest smartphone market globally by shipments, following China, experienced a 10% decline in smartphone shipments year-over-year during the April-June quarter, as reported by market research firm Counterpoint Research, signaling the sharpest drop in June-quarter shipments in six years due to rising memory prices elevating handset costs.<\/p>\n

The effect has been more severe in India compared to China, where smartphone shipments only decreased by 2% in Q2, according to Counterpoint. India’s market has been adversely affected as approximately 60% of its smartphone industry is centered in the sub-\u20b920,000 (under $210) range, where the rise in memory expenses has had a significant impact on prices, according to Tarun Pathak, the firm’s vice president of research, speaking to TechCrunch.<\/p>\n

India has established itself as an essential market for international smartphone brands over the years. With a population exceeding 1.4 billion and more than 700 million smartphone users, the South Asian nation has emerged as a bellwether for consumer demand in price-sensitive regions, making shifts in purchasing behaviors carefully monitored by device manufacturers, chip suppliers, and investors observing the overall status of the AI supply chain.<\/p>\n

Pathak informed TechCrunch that consumers are not expected to completely forsake smartphones. Nevertheless, many are anticipated to postpone upgrades, extending replacement cycles to about four years from the previous 3.5 years, while premium brands like Apple and Samsung remain more insulated from the downturn.<\/p>\n

The inconsistent effects are already altering competitive dynamics among smartphone manufacturers. Samsung was the sole major smartphone brand to record shipment growth in India during Q2, experiencing a 2% year-over-year increase, according to Counterpoint. In contrast, Apple witnessed a 3% decline in shipments \u2014 although this drop was largely a result of supply issues and inventory shortages limiting iPhone deliveries.<\/p>\n

Consumers opting for higher-end smartphones have shown to be less affected by price hikes, with financing options making expensive devices more attainable, according to Prachir Singh, a senior analyst at Counterpoint Research, who relayed this to TechCrunch.<\/p>\n

The most significant pain has been felt at the bottom end of the market. Shipments within the sub-\u20b915,000 (under $150) category plummeted by 45% compared to a year earlier, according to Counterpoint. As Chinese brands are heavily reliant on entry-level and mid-range smartphones, their collective market share has dropped to its lowest in a second consecutive calendar quarter since 2020.<\/p>\n

The challenging financial landscape is also triggering strategic changes. Recently, Chinese smartphone brand OnePlus announced it would cease new product launches in Europe and North America while continuing its operations in India, following what it described as a meticulous evaluation. Counterpoint data shared with TechCrunch revealed that China accounted for 74% of OnePlus\u2019 global smartphone shipments to distributors and retailers in Q1, a rise from 59% a year prior, while India’s contribution decreased to 19% from 30%.<\/p>\n

In essence, OnePlus is withdrawing to markets where it can still achieve profitability, relinquishing ground in other areas \u2014 a trend likely to be seen across additional budget-oriented brands as margins tighten.<\/p>\n

Indeed, Pathak noted to TechCrunch that managing multiple sub-brands is only justifiable if each brand generates enough volume to cover shared expenses, and that equation becomes untenable as margins shrink. “Sub-brands typically overlap and share resources, and you require a minimum volume to validate the low margins. Profitability is the fundamental aspect guiding market operations,” he expressed.<\/p>\n

Consumers feel the squeeze<\/h2>\n

The strain on brands is translating directly to consumers purchasing their devices. Kiranjeet Kaur, associate research director for mobile phones research at IDC, stated that the Indian smartphone market is evolving from volume-driven growth to value-driven growth \u2014 indicating a decrease in overall sales but with each unit generating increased revenue \u2014 as elevated component prices render lower-priced smartphones less viable.<\/p>\n

The elevated costs for components are already being passed on to consumers. According to Pathak, smartphone prices in India have surged by 4% to 68%, depending on the model, and as prices increase, consumers are either opting for higher-priced models, delaying upgrades, or turning to the secondhand market.<\/p>\n

Financing has become “essential for affordability,” Kaur informed TechCrunch. She further noted that brands and retailers are also building up their inventory ahead of the festive season to secure lower costs before further increases in component prices.<\/p>\n

IDC additionally anticipates a double-digit decline in India’s smartphone shipments in Q2, a sharper drop than the 4.1% decline in the first quarter and the 5.3% drop in the preceding quarter, Kaur reported. However, she remarked that the firm’s estimates are not yet finalized.<\/p>\n

Kaur mentioned to TechCrunch that memory shortages and high smartphone prices are likely to continue at least until the end of 2027, although the rate of price increases should slow as consumers gradually adjust to new, higher price standards.<\/p>\n

“For Indian consumers, it’s a double-edged sword as the weak currency results in costlier imports, which adds to the pressure on margins for market players, with these costs being passed on to consumers,” Kaur concluded.<\/p>\n<\/div>\n

When you purchase through links in our articles, we may earn a small commission. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

<\/div>\n
\n

Following warnings from analysts about the impact of AI-driven demand for memory chips on consumer electronics, India is showcasing the most compelling evidence of this change, with increasing handset prices altering the smartphone landscape.<\/p>\n

The memory chips involved \u2014 RAM and storage elements \u2014 are the exact components that technology giants require in huge quantities to construct AI data centers. Companies like Samsung, SK Hynix, and Micron have been reallocating production capacity towards high-bandwidth memory, the specialized chips utilized in AI accelerators, as they yield significantly higher profits per wafer compared to the standard memory found in smartphones and laptops \u2014 resulting in reduced capacity and elevated costs for regular consumer electronics.<\/p>\n

India, the second-largest smartphone market globally by shipments, following China, experienced a 10% decline in smartphone shipments year-over-year during the April-June quarter, as reported by market research firm Counterpoint Research, signaling the sharpest drop in June-quarter shipments in six years due to rising memory prices elevating handset costs.<\/p>\n

The effect has been more severe in India compared to China, where smartphone shipments only decreased by 2% in Q2, according to Counterpoint. India’s market has been adversely affected as approximately 60% of its smartphone industry is centered in the sub-\u20b920,000 (under $210) range, where the rise in memory expenses has had a significant impact on prices, according to Tarun Pathak, the firm’s vice president of research, speaking to TechCrunch.<\/p>\n

India has established itself as an essential market for international smartphone brands over the years. With a population exceeding 1.4 billion and more than 700 million smartphone users, the South Asian nation has emerged as a bellwether for consumer demand in price-sensitive regions, making shifts in purchasing behaviors carefully monitored by device manufacturers, chip suppliers, and investors observing the overall status of the AI supply chain.<\/p>\n

Pathak informed TechCrunch that consumers are not expected to completely forsake smartphones. Nevertheless, many are anticipated to postpone upgrades, extending replacement cycles to about four years from the previous 3.5 years, while premium brands like Apple and Samsung remain more insulated from the downturn.<\/p>\n

The inconsistent effects are already altering competitive dynamics among smartphone manufacturers. Samsung was the sole major smartphone brand to record shipment growth in India during Q2, experiencing a 2% year-over-year increase, according to Counterpoint. In contrast, Apple witnessed a 3% decline in shipments \u2014 although this drop was largely a result of supply issues and inventory shortages limiting iPhone deliveries.<\/p>\n

Consumers opting for higher-end smartphones have shown to be less affected by price hikes, with financing options making expensive devices more attainable, according to Prachir Singh, a senior analyst at Counterpoint Research, who relayed this to TechCrunch.<\/p>\n

The most significant pain has been felt at the bottom end of the market. Shipments within the sub-\u20b915,000 (under $150) category plummeted by 45% compared to a year earlier, according to Counterpoint. As Chinese brands are heavily reliant on entry-level and mid-range smartphones, their collective market share has dropped to its lowest in a second consecutive calendar quarter since 2020.<\/p>\n

The challenging financial landscape is also triggering strategic changes. Recently, Chinese smartphone brand OnePlus announced it would cease new product launches in Europe and North America while continuing its operations in India, following what it described as a meticulous evaluation. Counterpoint data shared with TechCrunch revealed that China accounted for 74% of OnePlus\u2019 global smartphone shipments to distributors and retailers in Q1, a rise from 59% a year prior, while India’s contribution decreased to 19% from 30%.<\/p>\n

In essence, OnePlus is withdrawing to markets where it can still achieve profitability, relinquishing ground in other areas \u2014 a trend likely to be seen across additional budget-oriented brands as margins tighten.<\/p>\n

Indeed, Pathak noted to TechCrunch that managing multiple sub-brands is only justifiable if each brand generates enough volume to cover shared expenses, and that equation becomes untenable as margins shrink. “Sub-brands typically overlap and share resources, and you require a minimum volume to validate the low margins. Profitability is the fundamental aspect guiding market operations,” he expressed.<\/p>\n

Consumers feel the squeeze<\/h2>\n

The strain on brands is translating directly to consumers purchasing their devices. Kiranjeet Kaur, associate research director for mobile phones research at IDC, stated that the Indian smartphone market is evolving from volume-driven growth to value-driven growth \u2014 indicating a decrease in overall sales but with each unit generating increased revenue \u2014 as elevated component prices render lower-priced smartphones less viable.<\/p>\n

The elevated costs for components are already being passed on to consumers. According to Pathak, smartphone prices in India have surged by 4% to 68%, depending on the model, and as prices increase, consumers are either opting for higher-priced models, delaying upgrades, or turning to the secondhand market.<\/p>\n

Financing has become “essential for affordability,” Kaur informed TechCrunch. She further noted that brands and retailers are also building up their inventory ahead of the festive season to secure lower costs before further increases in component prices.<\/p>\n

IDC additionally anticipates a double-digit decline in India’s smartphone shipments in Q2, a sharper drop than the 4.1% decline in the first quarter and the 5.3% drop in the preceding quarter, Kaur reported. However, she remarked that the firm’s estimates are not yet finalized.<\/p>\n

Kaur mentioned to TechCrunch that memory shortages and high smartphone prices are likely to continue at least until the end of 2027, although the rate of price increases should slow as consumers gradually adjust to new, higher price standards.<\/p>\n

“For Indian consumers, it’s a double-edged sword as the weak currency results in costlier imports, which adds to the pressure on margins for market players, with these costs being passed on to consumers,” Kaur concluded.<\/p>\n<\/div>\n

When you purchase through links in our articles, we may earn a small commission. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n","protected":false},"author":2,"featured_media":3491033,"comment_status":"open","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3491032","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts\/3491032"}],"collection":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/comments?post=3491032"}],"version-history":[{"count":0,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts\/3491032\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/media\/3491033"}],"wp:attachment":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/media?parent=3491032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/categories?post=3491032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/tags?post=3491032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}