MC EXCLUSIVE Rupee slide, component costs to push up smartphone prices in 2026, demand may take a hit

Smartphone

Get ready to pay more for your next phone. As the rupee continues to slice and component costs climb, smartphone brands are gearing for another round of price hikes, especially in the popular sub-Rs 10,000 and Rs 10,000–20,000 ranges.

Analysts warn that these pressures won’t ease soon, meaning costlier phones, slower upgrades, and longer waits before you replace your device well into 2026.

The warning comes as the rupee plunged to a new low of to 89.76 against the dollar on December 1, going past its previous worst performance of 89.49 about two weeks back.

Smartphone prices are already up by up to Rs 2,000, while several premium devices have seen even steeper rise in their adjusted launch prices.

The post-festive hikes by Chinese brands Oppo, Vivo, Xiaomi and South Korea’s Samsung are being driven by surging memory prices and wider supply-chain pressures pushing up other critical components, Moneycontrol reported on November 4.

A major shock is building around memory components, especially LPDDR4, which is central to low and mid-tier Android devices.

With global production shifting toward LPDDR5, analysts expect a supply crunch that will further inflate costs.

Market trackers also warned that a short-term bottleneck are likely to emerge in system-on-chips (SoCs) from Q1 2026, adding pressure to an already strained supply chain.

Rupee depreciation is amplifying a structural cost problem driven by memory inflation, Sanyam Chaurasia, principal analyst at Omdia, told Moneycontrol.

“With 4GB LPDDR4 prices rising from $9.9 in Q3 2025 (up 29 percent vs Q1) and projected to reach around $22 by early 2026, brands can no longer absorb entry-level cost pressure—now worsened by currency weakness,” he said.

This is already restricting the availability of sub-Rs 10,000 smartphones and pushing up retail prices.

Higher prices are delaying replacements and suppressing first-time buyer demand in the most price-sensitive categories, Chaurasia said.

India is moving toward “a structural price re-basing rather than incremental price hikes”, he said

Tarun Pathak, research director at Counterpoint, said the sub-Rs 10,000 segment will be among the worst hit, with demand weakening and fewer users opting to upgrade.

The segment, which contributes around 18 percent to India’s total shipments, is expected to fall to an all-time low of nearly 16 percent.

The vital Rs 10,000–20,000 category, which typically accounts for 43 percent of volumes, is likely to dip to 40–41 percent, Counterpoint Research said.

Memory, which already accounts for 30–31 percent of the bill of materials in $100–200 devices, is expected to rise to 45–48 percent by Q1 next year, as a weak rupee drives costs higher.

“At this cost structure, ultra-low price points are no longer viable. We expect India’s smartphone ASPs to rise by 8–10 percent over the next 12 months, with the sharpest inflation below Rs 12,000, effectively shifting the mass-market entry threshold upward,” Chaurasia said.

Upasana Joshi, senior research manager, Devices Research, IDC Asia Pacific, said Android devices will absorb the brunt of rising memory costs, with the impact particularly severe for low-to-mid-range models dominated by Chinese vendors.

iPhones, she said, will retain strong demand, although their growth will likely moderate compared to the previous year.

IDC anticipates “a significant ASP (average selling price) increase of nearly 10 percent in the first half of 2026.”

Even with festive discounts in the second half, Joshi said annual ASPs are expected to rise 5–7 percent year-on -year. “This comes after ASPs have already registered a rise of more than 10 percent throughout 2025, so far,” she said.

Premium devices will remain relatively insulated, as premiumisation continues, supported by financing penetration. “About 66 percent of those purchases are financed,” Pathak said.

Rising costs are prompting brands to adopt two different approaches. “Brands are following two strategies. Some brands are hiking prices — like Vivo, Oppo and Samsung. But some brands have instead reduced cashback — like Apple. So both strategies are being used,” Pathak added.

He expects prices to climb. “If we look at macro factors — prices and rupee depreciation — next year, handset prices will go up. It’s not like current models will suddenly become more expensive but new models will certainly launch at higher prices. So next year, phones will be more expensive,” he said.

Joshi said brands would face “escalated cost pressures” as LPDDR4 shortages deepen and production pivots to LPDDR5.

“A short-term supply bottleneck for SoCs may also emerge from Q1 2026. IDC thus forecasts a sluggish start to 2026, with supply relief possibly coming in the second half. However, as consumer demand remains weak, annual shipments for 2026 are still projected to see a minor decline,” she said.

Following a heavy festive sell-in during the third quarter and softer sell-out, brands are expected to focus on inventory correction in Q4, resulting in a 25–28 percent quarter-on-quarter shipment drop, an Omdia analysis says.

With weak mass-market demand and rising cost, Chaurasia expects India to close calendar 2025 at around 155 million units, a modest decline from 2024.

Joshi projects that after a 4 percent growth in 2024, the Indian smartphone market will reach 148–150 million units by the end of 2025, marking a low single-digit annual decline.

In 2026, structural pressure on entry-level volumes is expected to rise as affordability resets upward, while mid-range and premium segments stay comparatively resilient.

Chaurasia said shipments are likely to hover around 152–154 million units in 2026, with downside risk if memory supply tightens further in the first half.

The already suppressed demand because of persistent price inflation will be further compounded by continued rupee depreciation and soaring component costs.