AI-driven memory-chip demand pushes Indian smartphone prices higher

Repeated smartphone price increases linked to demand for memory chips from artificial-intelligence companies and data centres are weakening sales in India, retailers and industry representatives have said. Vivek Singh, a South Delhi retailer, told The Hindu that he had seen prices rise continuously for the first time in two decades. He said daily visitors to his shop had fallen into a pattern in which only a small proportion of customers completed purchases.

Since February, manufacturers including Vivo, Samsung, Realme, Oppo, Nothing, Poco and Xiaomi have sent retailers notifications announcing increases. The rises have ranged from ₹1,000 to ₹5,000, with retailers saying some budget models have more than doubled in price. Kailash Lakhyani, founder chairman of the All India Mobile Retailers Association, said some customers were choosing less powerful or secondhand phones.

Others were waiting for the festival season in the hope of discounts, while some were holding off amid speculation about a possible reduction in the 18 per cent goods and services tax on smartphones. Lakhyani said retailers holding older stock could benefit from higher margins after price increases. He estimated that 60 per cent of phones were still being purchased, while 20 per cent of customers were settling for less powerful or used devices and another 20 per cent were waiting.

He said phone companies had indicated that the situation could continue until 2028 or even 2030, although he expected future increases to be less dramatic than those seen this year. The pressure is global. Counterpoint Research forecast that shipments of smartphones priced below $200 could fall by about 40 per cent between 2025 and 2030.

Neil Shah, the firm’s founder, said price-sensitive markets in India, Africa, Latin America and parts of Asia were bearing the greatest impact, with consequences for connectivity and device replacement.