As memory costs surged 8-12 per cent in the first three months of 2026, brands opted to maintain smartphone prices by manipulating adjacent features in the latest models.

From pocket-friendly brands to the high-end labels, smartphone companies are struggling to meet memory cost inflation in the face of supply constraints. Entry and base segments have been hit hardest, with the steepest increases in the sub-₹20,000 segment where memory costs are proportionally highest.

To off-set these costs, brands like Xiaomi Redmi, Oppo, Realme have settled on the quality of camera resolution, display technology and weight for newer models while improving the quality of older models and increasing their price.

Individual brands also compromise other features such as audio quality, in-box add-ons and additional specifications like water resistancy.

“This is a trade-off that happened even when 5G phones came about. Displays were downgraded to give masses 5G chips in their phone. Consumers have no choice, many do not even notice,” said Faisal Kawoosa, Chief Analyst and Founder of Techarc.

On the flipside, he pointed out that brands also have to resort to price regressions during inflationary times. Currently, 25-30 per cent of annual smartphone sales are expected to be affected if prices continue rising at the current pace, as per a joint study by Techarc and Trakin Tech. Moreover, 54 per cent of the demand that exists today is expected to not convert into a purchase this festive season.

The trend extends to high-end phones like iPhones as well. The Bill of Materials cost for iPhone 17e was estimated to have increased by 15.6 per cent compared to the Apple iPhone 16e, primarily driven by a sharp rise in memory pricing, as per Counterpoint Research in late April. Here too the brand adjusts for the heavy prices by compromising on features like display.

Yet to make matters worse, analysts estimate the price rise to continue in coming months.

All the tweaks and pivots by comapnies can be attributed to the global NAND flash and DRAM memory costs that surged from November 2025, forcing OEMs to reprice across all tiers.

While brands with a longer view have managed to sail through the earlier months in 2026, the cost dilemma will worsen in the second quarter of calendar 2026, as per IDC.

“Q1 always has a cyclical dip in market demand since everyone waits for schemes and discount since we are an upgrader market. However, brands and channel partners are now trying to explan to people that there is no need to defer purchases. Prices will not go back to the previous value,’ said Upasana Joshi, Senior Research Manager, IDC.

In face of such developments, companies are now convincing individuals that “now is the best time to buy a phone” considering prices will only increase going forward. While analysts seemed to agree with this sentiment, the cost and quality control by brands has done little to change minds.

The Trakin-Techarc report highlighted how only 22 per cent of consumers in their survey said they would settle for less in terms of specs but 48 per cent said they’d rather postpone the purchase until prices settle.

Faced with such supply constraints, currency pressures, price-rise projections through the second-half of 2027, the affordibility challenge is expected to structurally worsen before improving. Consumers may well need to draw excel sheets of their own to weigh the pros and cons of their next smartphone device.

Published on June 3, 2026