Smartphone Price Hike: If the cost of storage and memory chips doesn't decrease, affordable phones could disappear from the market. Shipments of phones priced under ₹38,000 could also decline by 22 percent this year.
Smartphone Price Hike: Shipments of affordable smartphones are expected to decline sharply this year.
Smartphone Price Hike: Due to a shortage of storage and memory chips, the prices of phones across all segments, from the cheapest to the most expensive, are rising . Cheap phones are becoming increasingly expensive, and companies are struggling to launch new affordable phones. This has led to fears that affordable phones may disappear from the market. Phones that were considered affordable until recently have seen their prices increase by thousands of rupees, making them even more expensive to purchase.
There will be a decline in the shipment of cheap phones.
According to a recent report from Omdia, shipments of phones priced under $400 (approximately Rs. 38,000) are expected to decline by more than 22 percent this year. The biggest reason for this is the shortage of storage and memory chips. AI features are now requiring more memory in phones, but the shortage of these chips has made it difficult for companies to produce such phones. Their margins are already low, and now they can't offer all the features in phones without increasing prices.
Efforts to keep prices low are no longer working.
According to reports, companies are constantly trying to keep prices low. To do this, they're using cheaper display panels, camera sensors, and radio components, but now there's no room for further reductions. This is why companies like Oppo, Xiaomi, and Vivo are having to make their phones more expensive or cut down on features to prevent price increases.
Why is there a shortage of memory chips?
Following the AI boom, the demand for storage and memory chips for data centers has increased. To meet this demand, chip manufacturers reduced the production of chips used in the consumer market, such as laptops and smartphones. Now, their entire focus is on making chips for AI data centers. This has led to a shortage of chips for devices like smartphones. The increase in their prices has led to rising costs for companies. An Omdia report shows that in the first quarter of this year, 60 percent of companies' expenses for phones priced below Rs 38,000 were solely on purchasing memory chips. This shows how difficult it has become for companies to make affordable phones.
