Smartphone shipments in India fell by 10% year-on-year from April to June, marking the worst second-quarter performance in six years, according to Counterpoint Research.
The decline is attributed to the rising cost of memory chips amid the AI boom. Industry leaders like Samsung, SK Hynix, and Micron are shifting production to HBM for data centers, reducing the supply and increasing the cost of components for smartphones.
According to IDC, memory chip prices have increased nearly 300% over the past year. In budget smartphones, memory now accounts for over 65% of production costs.
India has been more affected than China, where the decline was just 2% over the same period. About 60% of the Indian market consists of devices priced under ₹20,000 (~$210), where the price increase in memory has hit hardest, according to Counterpoint Vice President Tarun Pathak in a TechCrunch interview.
Shipments of smartphones priced under ₹15,000 (~$150) plummeted by 45%. The combined market share of Chinese brands fell to its lowest since 2020. Samsung was the only major manufacturer to see growth in India, with a 2% year-on-year increase. Apple’s shipments in the country fell by 3%, but this was due to a shortage of iPhones rather than demand.
Smartphone prices in India have risen by 4-68% depending on the model, Pathak noted. Consumers are holding onto their old devices longer, with the replacement cycle extending from three and a half to four years. Some buyers are turning to the secondary market.
A Global Issue
The crisis has affected the entire industry: global smartphone shipments in the second quarter declined by 11%, reaching their lowest level since 2013. Xiaomi, Oppo, and vivo experienced double-digit declines due to their focus on the budget segment. In contrast, Samsung regained global leadership with a 24% market share. Apple captured a fifth of the global market for the first time. Counterpoint forecasts a 14% market contraction for 2026.
IDC analyst Kiranjeet Kaur estimates that the memory shortage and high prices will persist at least until the end of 2027. The weak rupee exacerbates the situation, as the cost of importing components rises, leading manufacturers to pass these costs onto consumers.
The crisis is already prompting companies to rethink their strategies. Chinese brand OnePlus, a subsidiary of Oppo, announced it will halt new launches in Europe and North America, citing a “thorough evaluation” as the reason. However, the company will maintain its business in India, its largest market outside China.
In November 2025, analysts and chip manufacturers warned of a memory shortage due to the AI boom. They predicted that in 2026, it would impact consumer electronics and the automotive industry.
