The ongoing chip shortage has intensified pressure on Chinese budget smartphone manufacturers. The growing demand for AI technology has led to a significant shortage of memory chips, disrupting the global supply chain. A new report from market research firm IDC indicates that smartphone prices could rise by up to 14% this year. The report suggests that users planning to purchase low-cost smartphones may face higher prices in the coming months.
Largest decline in global smartphone shipments in a decade
IDC has also predicted the steepest decline in global smartphone shipments in the past ten years. Due to the chip shortage, smartphone companies have little choice but to increase prices to offset rising component costs.
The impact is already visible, with brands such as Samsung announcing price hikes in recent days.
According to IDC, shipments for low-end smartphone vendors are expected to decline this year. The surge in demand for AI chips, combined with memory chip shortages, could raise the average selling price of smartphones by up to 14%.
However, the firm expects smartphone prices to stabilize in the second half of 2027, as improvements in the memory chip supply chain are anticipated by next year.
Budget smartphones under Rs 9,000 may be hit hardest
IDC states that the chip shortage is likely to have the greatest impact on smartphones priced under $100 (Rs 9,000). Rising memory chip costs are expected to significantly increase the average selling price of budget devices.
Chinese brands Vivo and iQOO have reportedly decided to increase the prices of six of their models. These devices may become more expensive in India in the coming days.
Samsung also raises prices
Recently, Samsung has raised prices for its budget smartphones. The Samsung Galaxy S26 series, launched this year, has also seen price increases of up to Rs 10,000.
The standard model has received a price hike of Rs 6,000, while the Ultra model’s price has increased by Rs 10,000.
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