Memory Chip Price Surge Reshapes India’s Smartphone Market

• Rising memory costs are pushing budget smartphones above earlier price levels.

• Sub-USD 150 phones may largely disappear once current stock runs out.

• Chinese brands are facing pressure in India’s entry-level segment.

• Samsung and Apple are gaining from the shift toward higher-priced devices.

• India’s smartphone value sales rose despite lower shipment volumes.

Rising memory chip prices are changing the competitive balance in India’s smartphone market, creating new pressure for budget-focused Chinese brands while improving the position of mid-range and premium players such as Samsung and Apple.

India, the world’s second-largest smartphone market by volume, has long been driven by affordable devices. Chinese brands built their dominance in the country by offering feature-packed phones at low prices, particularly in the sub-USD 150 category. But industry experts now say that segment is becoming increasingly difficult to sustain.

Analysts told CNBC that the era of smartphones priced below USD 150 may be coming to an end. Once existing inventory is sold, new models with comparable features are expected to arrive at significantly higher prices because manufacturers can no longer absorb the steep rise in memory component costs.

Neil Shah, co-founder of Counterpoint Research, said newer Chinese smartphone models in India could be priced between USD 200 and USD 250, compared with less than USD 150 earlier. Counterpoint data shows that brands in the sub-USD 150 category have already increased prices by as much as 40%.

The shift weakens the value-for-money appeal that helped Chinese smartphone makers expand rapidly in India. For years, consumers in the budget segment were able to buy phones with strong specifications at relatively low prices. Higher memory costs are now making that strategy harder to maintain.

At the same time, rising prices in the entry-level category are narrowing the gap between budget phones and mid-tier devices. That could make consumers more willing to consider brands such as Samsung and Apple, particularly when financing options make more expensive handsets easier to purchase.

Market data from IDC shows how this transition is already playing out. Smartphone shipments in India fell to 64.2 million units in the first half of 2026, with the entry-level segment recording a particularly sharp decline. Overall shipment volume dropped 7.9% year on year.

However, the market’s value moved in the opposite direction. Despite fewer units being shipped, total sales value rose 3.6%, while the average selling price reached a record USD 315. This indicates that Indian consumers are buying fewer low-cost devices and more higher-priced smartphones.

Chinese brands were hit especially hard as they struggled to persuade price-sensitive buyers to accept higher prices, IDC said. The impact was most visible in the June quarter, when shipments of several major Chinese smartphone makers declined from a year earlier.

According to IDC, Vivo shipments fell 13.9%, Oppo declined 8.5%, Xiaomi dropped 10%, and Realme slid 14.2% during the quarter. Among leading Chinese brands, OnePlus, which operates more in the higher-end segment, saw the smallest decline at 2.5% year on year.

By contrast, Samsung and Apple proved more resilient. IDC data showed Samsung’s shipments rose 0.4% in the June quarter, while Apple’s increased 0.7%. IDC also reported that the iPhone 17 remained the top-shipped device in India for the first two quarters of 2026.

Upasana Joshi, senior research manager for devices research at IDC Asia Pacific, told CNBC that the global memory chip shortage had driven prices higher and hurt entry-level demand the most. That segment is the one Chinese brands depend on heavily, making them more exposed to the cost shock.

The pressure has also changed market-share dynamics. During the June quarter, the gap between Vivo, India’s leading smartphone seller, and second-ranked Samsung narrowed. Samsung gained nearly 200 basis points of market share, while Apple added around 100 basis points.

Vivo’s share, meanwhile, slipped by 60 basis points, according to IDC. Counterpoint Research estimates a larger decline of about 140 basis points for Vivo during the same period.

Samsung’s position is helped by its broad portfolio in India. The South Korean company sells phones ranging from around USD 200 to more than USD 800, allowing it to compete across multiple price bands. Analysts say Samsung has been directly challenging Vivo in the USD 200 to USD 300 segment.

Another advantage for Samsung is supply-chain control. The company has access to in-house memory chip production, giving it more flexibility at a time when memory prices are rising sharply. Many Chinese smartphone makers, by contrast, have relied on components from suppliers such as MediaTek, SK Hynix and Samsung.

When memory prices began increasing last year, some Chinese companies shifted toward chips from UNISOC and CXMT to defend their market positions, Shah said. That helped temporarily, but analysts now say the strategy may not be sustainable.

CXMT has recently raised funds to expand capacity for China’s artificial-intelligence and data-centre market, which may divert resources toward higher-end products. That could reduce the ability of budget smartphone makers to rely on lower-cost memory supplies.

Counterpoint Research estimates that memory chip prices have increased fourfold since September 2025 and may climb further in the coming months. If that happens, smartphone makers will face continued pressure to raise prices or reduce specifications.

For Indian consumers, the change could mark a turning point. The country has traditionally been seen as highly price-sensitive, with demand concentrated in affordable models. But as budget phones become more expensive, the difference between entry-level and mid-range devices may become less meaningful.

Financing options could accelerate that shift. Easy monthly instalments and trade-in programmes make premium devices more accessible, allowing consumers to stretch their budgets when the perceived value of cheaper phones declines.

The result may be a market that sells fewer units but generates higher revenue. Chinese brands, which built their success on aggressive pricing, will need to adjust either by improving their value proposition at higher price points or by strengthening their presence in premium categories.

Samsung and Apple, meanwhile, appear better placed to benefit from the ongoing premiumisation of India’s smartphone market. If memory costs remain elevated, India’s smartphone industry may continue moving away from ultra-low-cost devices and toward a more mid-market and premium-led structure.