Now Reading: Memory chip crunch may wipe out sub-₹10,000 smartphone segment
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Memory chip crunch may wipe out sub-₹10,000 smartphone segment
The sub-₹10,000 smartphone segment in India faces near-extinction as memory chip prices have surged over 300% year-on-year, according to IDC data. Research director Tarun Pathak of Counterpoint said making a ₹10,000 phone…
The sub-₹10,000 smartphone segment in India faces near-extinction as memory chip prices have surged over 300% year-on-year, according to IDC data. Research director Tarun Pathak of Counterpoint said making a ₹10,000 phone now requires buying memory worth ₹4,000 to ₹4,500, leaving almost no room for other components or margins. The segment's market share has crashed from 19% in Q2 2025 to just 4% in Q2 2026, with sales dropping 81% year-on-year.
IDC senior research manager Upasana Joshi said the segment is disappearing in real time as brands cut model launches and withdraw support rather than absorb cost increases. Some manufacturers are relaunching 4G models as a stopgap, lifting 4G's share to 11.1%, but analysts say this is a temporary cushion. Budget-conscious buyers are turning to refurbished phones or holding onto older devices longer.
The decline is expected to continue through 2026 as memory prices are forecast to remain high until 2028. Consumers face a choice between older devices and refurbished options, with financing scarcely available at this level.
Indian Opinion Analysis
Memory chips are a commodity whose prices are set by global supply and demand, not by Indian regulators. The DRAM and NAND flash markets are dominated by three South Korean and US manufacturers, Samsung, SK Hynix and Micron, which have cut production capacity, driving up costs. India's smartphone market has historically been volume-driven, with margins in the budget segment below 3%, leaving no buffer for a 300% component price hike. The 173 million sub-₹10,000 phones shipped last year represent a voter base and a consumer class that may now be priced out of new 5G devices. The Telecom Regulatory Authority of India (TRAI) tracks mobile handset affordability, but has no power to cap component prices.
Source: thehindu.com
This brief was synthesised by AI from the source linked above.
