India’s smartphone business may have lost an old festive-season weapon
India's smartphone market faces challenges this festive season as rising memory costs lead to higher device prices. Major brands are already increasing prices across various models due to component cost pressures. This situation is expected to dri...
For years, consumers have timed their smartphone purchases to coincide with the festive season, when they could count on some of the year’s deepest discounts and best deals. This year, however, the equation could look quite different.
As the cost of memory and other key components rises, smartphone makers may have less room to absorb higher expenses, leaving the industry in a difficult position just as shoppers begin looking for festive buysAfter posting its strongest festive-season sales since 2020 last year, India’s smartphone market is heading into a tougher season this year, with volumes expected to fall 10% from a year earlier, Prachir Singh, senior analyst at Counterpoint, told ET Online.
How severe is the memory shortage?
India’s smartphone market declined 11% year-on-year in Q2 2026, as record-high memory costs prompted multiple price hikes across the industry, Counterpoint said in its August Smartphone Market Share report.
The global smartphone market also contracted 7.4% year-on-year to 276.3 million units in the second quarter of 2026, according to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. It was the second consecutive quarter of year-on-year decline for the global smartphone market, with the memory shortage adding to cost and supply pressures.
Memory prices are still under pressure, even as suppliers work to add more capacity. Market research firm TrendForce expects conventional DRAM (memory chips) contract prices to rise 13-18% in Q3 2026, compared with a 93-98% increase in the first quarter.
At the heart of the supply crunch is the rapidly growing demand for memory used in artificial intelligence infrastructure.
SK Hynix, Samsung Electronics Co. and Micron Technology Inc. together dominate the global supply of memory chips. In recent years, the three companies have shifted production towards a specialised form of memory designed for Nvidia’s in-demand AI accelerators.
That shift has contributed to a shortfall in the production of more conventional memory used in smartphones, PCs and other consumer devices.
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Industry-wide, supply of the basic wafers used to manufacture chips is lagging demand by more than 20%, SK Group chairman Chey Tae-won, who owns the SK Hynix, had told reporters on the sidelines of Nvidia Corp.’s GTC event in San Jose.
“Major fab expansions in Korea, US and Japan would reach meaningful output between the second half of 2027 and 2028. Until then all buyers of consumer chips would see tighter supply leading to a structural and sustained cost pressure,” Rohan Lobo, Partner and TMT Industry Leader, Deloitte South Asia told ET Online.
Smartphone makers pass on higher costs
Multiple manufacturers have already raised prices across select models as they respond to higher memory and other component costs.
Realme, Oppo, Vivo, Samsung and OnePlus have increased prices across select models, while Apple has raised prices on several iPhone models in India following the launch of the iPhone 18 Pro series.
According to an ET Online report, since August 18, Realme has reportedly raised prices by Rs 1,000-4,000 across several models. Oppo has increased prices by up to Rs 5,000 on select Reno and A-series phones, while Vivo has raised prices by Rs 500-4,000 on multiple models in some regions.
Samsung has also increased prices on select S-series, M-series and F-series smartphones. One variant of the Galaxy S25 is now Rs 12,000 more expensive.
OnePlus has raised prices of select smartphones by Rs 2,000-4,000.
Xiaomi had also acknowledged the pressure created by higher memory costs, reported Reuters.
When it comes to Apple, the base iPhone 17, which was launched at Rs 82,900 for the 256GB variant, is now priced at Rs 99,900. The 512GB variant is priced at Rs 1,24,900. Apple has also raised prices for the iPhone 16, iPhone 17e and iPhone Air. The iPhone 17e has received a Rs 15,000 increase, with its price rising from the introductory price of Rs 64,900 to Rs 79,900. The iPhone Air has seen the biggest increase among the models listed. Its price has risen by Rs 30,000, from Rs 1,19,900 to Rs 1,49,900.
Apple has also priced the new iPhone 18 Pro and iPhone 18 Pro Max higher than earlier generations, with the Pro starting at Rs 1,64,900 in India.
“Memory costs are up nearly 300% from a year ago, and now account for over 65% of Bill of Materials (BOM) at the low end, making survival increasingly difficult for Original Equipment Manufacturer (OEMs) with low-end portfolios,” said Nabila Popal, senior research director for Worldwide Consumer Devices, IDC.
The cost increase is particularly difficult for brands heavily exposed to lower-priced smartphones, where margins are thinner.
“With memory and component costs remaining elevated, further price hikes will be difficult to avoid, while brands will have limited room for steep discounts,” Singh told ET Online. “Instead, they are likely to focus on affordability through EMI, cashback, exchange offers and targeted promotions.”
Festive season under pressure
Higher price tags are likely to push more buyers towards financing options this festive season. The trend was highlighted in Counterpoint Research’s May Smartphone Financing Tracker projected that financing options including NBFC financing, credit-card EMIs and debit-card EMIs would account for 42% of total smartphone sales in 2026, up from 35% last year.
According to Deloitte South Asia’s Lobo, rising prices are likely to push the industry to explore other ways to attract buyers. “Financing schemes also mean a shift towards offline purchases, which support better underwriting of customers. We observed the share of offline sales rise to about 55-60 per cent in the June quarter, while online volumes declined. We have also seen brands deliberately sunset their entry-level phones,” he said. “Further, the used-phone market appears to be absorbing some of the displaced demand.”
On sales during festive season, Zeba Khan, Director at Amazon India told ET Online that the e-commerce giant is working closely with banking partners to bring some of the best value of the year on smartphones, through no-cost EMI, exchange offers, bank partnerships and coupons. “We are backing that with the widest selection across price points, a strong line-up of new launches, and inventory and delivery readiness that gets devices to customers quickly,” said Khan.
The shift towards financing is also playing out alongside a broader change in where consumers are buying their devices.
For premium smartphone buyers, exchange offers could become increasingly important as brands have less room to rely on outright discounts.
“For us, therefore, the focus this festive season will be on making upgrades more accessible rather than relying only on discounts. If a consumer can get a good value for an existing device and spread the remaining cost through manageable installments, a premium smartphone can still fit within their budget,” said Swarn Bajaj, Founder & CEO, P3S Ventures, an Apple-authorised premium reseller. “Price increases may impact some purchase decisions or delay upgrades, but the aspiration for better technology and premium devices remains strong."
However, the pressure could intensify once the festive shopping period ends, particularly if promotions begin to taper off while consumer demand remains weak.
“The bigger challenge could come after the festive season, as promotional intensity tapers off and demand weakens further. If memory costs remain elevated, inventory correction could add to the pressure, resulting in a sharper post-festive market decline,” Counterpoint’s Singh said.
