Manufacturers are planning a hike of over 15 per cent as memory prices shoot through the roof.
It's a worrisome trend.
More than 80 mobile phone models, out of roughly 200 sold in the country, have already seen average price increases of over 15 per cent.
Consumers should brace for another hit, say analysts at Counterpoint Research, based on feedback from mobile companies.
Manufacturers are planning a further average hike of over 15 per cent in the second quarter of calendar year 2026, as memory prices shoot through the roof.
There's more bad news.
Counterpoint Research Director Tarun Pathak says phone launches are becoming more expensive, with prices in many cases set to be 30-40 per cent higher than earlier estimates.
The Indian Cellular & Electronics Association (ICEA), alluding to feedback from its members, says the impact of rising memory prices has been most severe in the sub-Rs 15,000 segment, where prices have already risen by over 20 per cent.
"The impact is more severe at the lower end of the market, below Rs 15,000. Many companies are downsizing specifications -- reducing memory from 128 gigabyte (>GB) to 64 GB -- to keep prices under control," said a senior ICEA executive.
Research firm Techarc, which tracks mobile phone pricing, observes that while some smartphone models have become 25 to 35 per cent more expensive over the past year, the majority have seen increases of 7 to 15 per cent.
"Currently, brands are raising prices for select models where consumers can absorb the increase without a drop in demand. However, if memory prices rise beyond a point, there will be no option but to increase prices across models, even if it shrinks demand," said Faisal Kawoosa, founder of Techarc.
Global data shows dynamic random-access memory prices have risen by over 50 per cent year-on-year in the first quarter of CY 2026, while negative-AND flash prices are up 90 per cent in the same period.
As a result, the total manufacturing cost of an entry-level phone (priced below $200) has jumped by over 25 per cent.
Companies have little choice but to pass on these increases to consumers.
Counterpoint estimates overall retail price hikes of $30 to $60 for budget phones this year, and up to $200 for premium models.
Pathak says memory prices could rise by another 80 to 85 per cent in Q2 CY 2026, making them more than four times higher than in the third quarter of CY 2025.
Memory already accounts for 30 to 40 per cent of a phone's bill of materials cost.
Demand is already taking a hit.
According to Counterpoint, India's weekly smartphone sales between the first and ninth weeks of CY 2026 fell 9 per cent year-on-year.
Higher prices, limited promotions and fewer launches have reduced store footfall, pulling down sales.
The market is projected to decline by 10 per cent in CY 2026, followed by an uneven recovery.
Feature Presentation: Ashish Narsale/Rediff
