Entry-level smartphone market hit hard as rising prices push Indian buyers away

India’s entry-level smartphone market is seeing a sharp slowdown as rising component costs, especially memory prices, make affordable phones more expensive than before, according to analysts and industry executives during a recent panel discussion on smartphone pricing trends. Executives from research firms including Counterpoint and IDC, along with smartphone brand representatives, said the sub-$100 smartphone category in India has been badly affected as brands struggle with increasing costs of memory, chipsets and other components. Analysts also warned that prices may continue rising through 2026 and could stabilize only by late 2027 or early 2028.Memory prices emerge as biggest problemCounterpoint Research Director Tarun Pathak said the growing demand for AI servers is affecting smartphone component supply globally. He explained that memory manufacturers are prioritising AI data centers and hyperscalers over smartphone companies, creating shortages and pushing prices sharply higher.“A memory that used to cost almost $20 is now $75,” Pathak said during the discussion. According to IDC Senior Analyst Upasana Joshi, memory costs that earlier formed 10% to 15% of a smartphone’s bill of materials now account for as much as 30% to 40%. She said the India smartphone market is undergoing a “structural reset,” especially at entry-level price points.Entry-level market sees steep declineIDC said the sub-$100 smartphone category in India has witnessed a major decline because brands are moving away from low-margin affordable devices. “We call it at IDC as forced premiumization,” Joshi said. “Because at entry level there is no supply of those kind of devices anymore.”Analysts noted that many consumers who earlier purchased phones under ₹10,000 are either delaying upgrades, shifting to second-hand devices or stretching budgets through EMI schemes to buy higher-priced models.Counterpoint’s Tarun Pathak said the price gap between feature phones and entry-level smartphones has now reached around ₹4,000, reducing the pace of users shifting from feature phones to smartphones.Consumers confused by rising pricesTech creator Devinder Maheshwari said consumers are struggling to understand why phones with lower specifications are launching at higher prices. “People are confused about this,” Maheshwari said. “The new phones are launching with slightly lesser specs than the previous version, but at the same time they are being priced much, much higher.”He added that many buyers are now spending more money to ensure their next smartphone lasts several years.Brands expect prices to keep risingFrancis Wong said smartphone brands are finding it difficult to absorb rising costs. “I don’t think the price will stop rising anytime this year,” Wong said during the discussion.He added that brands are becoming more selective about features and product launches as costs continue to rise. Industry executives also said consumers are upgrading phones less frequently and focusing more on long-term experience, battery life and brand trust instead of only specifications.