For the longest time, there’s been a wild global trend that has, over the past 2-3 years, become a phenomenon in India as well: people gathering in lines to get the latest iPhone. However, when you exclude the iPhone and look at smartphone buying as a whole, India doesn’t really have buyers who get new phones for themselves right at launch. They wait a few months, let the festive sales arrive, and eventually the same device becomes much more affordable. That cycle has existed for so long that most of us naturally assume prices will always fall with time. But just this morning, I came across a statement from Nothing co-founder Akis Evangelidis about rising smartphone prices that made me think: well, this makes sense.
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You see, phones are getting quite expensive. So much so that discounts do not feel as aggressive anymore, and brands themselves seem to be operating under growing pressure. According to Evangelidis, AI may be one of the biggest reasons behind it.
‘What if I tell you that the best time to buy your smartphone was yesterday?’ Akis said in the Instagram reel. Of course, on the surface, it sounds like a classic marketing line, but then the explanation that followed was actually quite interesting. ‘Basically, the memory chips being used in your phones are now also being used across all the AI data centres. Now there is a surge in demand, and it becomes a simple demand and supply game.’
In simple terms, the same companies producing memory components for smartphones are also supplying chips for AI infrastructure. And right now, AI companies are spending billions globally to expand data centres and computing power. That demand is huge, and according to Evangelidis, smartphone brands are now feeling the impact directly.
‘So let me put that in context. When you’re looking to develop a smartphone, let’s say that you want to retail around like $400, you’re going to set yourself a bump cost target, which is the bill of materials, what it costs for you to make that smartphone, around $200. Within those $200, early last year, the memory chip was $20. Now, recently, that cost has crossed over 100, even $120.’
That is a massive increase if you think about it from a brand’s perspective. Smartphone companies already operate in an extremely competitive market, especially in countries like India, where pricing can decide whether a device succeeds or disappears within weeks. If one component suddenly becomes dramatically more expensive, brands either have to absorb the loss or increase prices. And honestly, parts of this are already visible.
Over the last year or so, I have personally noticed that many smartphones are launching at noticeably higher prices than what we would have expected a few years ago. The Rs 25,000 segment is slowly creeping closer to Rs 30,000 and beyond. Even phones that do see a price drop later are not seeing the same kind of sharp price cuts that were once common during sales.
Evangelidis believes this may continue for quite some time. ‘You see, most of us are used to seeing a smartphone launching at a certain price point, and you know as the months go by, that price kind of gradually decreases, but actually this is most likely not to happen.’ He also claimed that the situation may not improve before at least the second half of 2027. ‘And what that means is that even though smartphones have been launched, the prices for those smartphones will keep on increasing, most likely every quarter.’
Interestingly, Akis is not the only one who shares this sentiment. Recent data from IDC also suggests that smartphone pricing pressure is becoming a real concern in India. In its Q1 2026 report, IDC noted that average smartphone selling prices in India have reached a record high of $302 (roughly Rs 29,200), even as the market itself saw a shipment decline. The research firm also pointed towards rising memory prices as one of the reasons for the increasing manufacturing costs across the industry.
IDC further mentioned that brands may struggle to offer aggressive discounts going forward because of tighter margins and higher component costs. In other words, the days of massive price drops a few months after launch may slowly become less common.
And the concern is not limited to one research firm alone. According to Prabhu Ram, India’s smartphone market is already beginning to feel the pressure from rising DRAM and NAND flash prices. ‘India’s smartphone market recorded one of its weakest quarterly performances in recent years, with shipments declining 2 per cent year-on-year in Q1 2026. The slowdown has been driven primarily by rising DRAM and NAND flash prices, as growing demand for memory chips from AI data centres continues to tighten global supply and elevate component costs. As a result, smartphone brands are facing sustained pricing pressure, which is increasingly being passed on to consumers,’ Ram said.
What makes this more interesting is how uneven the impact appears to be across price categories.
‘In Q1 2026, the premium smartphone segment remained resilient, growing 25 per cent on the back of aspirational purchasing and ecosystem-led upgrades. In contrast, affordability pressures continued to weigh heavily on the mass market, with the affordable segment declining sharply by 46 per cent and the value-for-money segment falling 12 per cent,” he added.
That trend itself says a lot about where the smartphone market may be heading. Premium buyers are still upgrading, but the affordable segment, traditionally the heart of India’s smartphone market, is beginning to struggle.
Ram also believes consumers may need to prepare for a longer phase of elevated smartphone pricing. ‘Unlike previous market cycles where smartphone prices typically softened within a few months of launch, the industry may now witness a more prolonged period of elevated pricing, particularly across mid-range and affordable segments. We expect these cost pressures to persist through 2027, which could further delay upgrade cycles among price-sensitive consumers, even as premium demand remains relatively resilient.’
Of course, memory prices are not the only reason phones are becoming expensive. Smartphone brands are also spending more on cameras, AI features, premium materials, chipsets, software support, and marketing. Consumers themselves now expect more from phones than they did five years ago. But AI’s sudden rise seems to have created an entirely new layer of pressure on the supply chain.
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Companies like OpenAI, Google, Microsoft, and Meta are all investing heavily in AI infrastructure right now. And while most people see AI through chatbots and smart features, the hardware powering all of this sits somewhere in the background, quietly affecting other industries too.
The bigger question now is what this means for buyers in India. For years, consumers here have been incredibly price-conscious and extremely patient. As I already mentioned, most people do not rush to buy phones on day one unless there is a strong launch offer attached. But if smartphone prices continue rising while discounts become smaller, consumer behaviour itself may slowly start changing.