Report: Rising Component Costs Could Lead to Smartphone Price Increase in India in Q2 2024
Samsung and Micron Set to Increase Component Prices, Potentially Elevating Smartphone Costs in India.
Smartphone sales have started to pick up in India and other markets according to recent reports, but a change in costs of an essential component could lead to prices of smartphones rising again in the coming months. The cost of memory chips used in handsets sold in the country from two component manufacturers is expected to rise, according to a report. The predicted price rise is likely to impact budget 5G smartphones the most, especially those priced under Rs. 10,000.
According to an ET Telecom report citing recent TrendForce data, the prices of smartphones in India could rise in Q2 2024, as both Micron and Samsung are planning to increase the price of their DRAM chips — a smartphone memory component — by up to 20 percent in the current quarter. The increase in costs is expected to translate into higher smartphone prices in the coming quarter, an anonymous industry executive told the publication.
The market research firm’s data reportedly estimates the contract prices of smartphones using the older LPDDR4x technology to rise by up to 8 percent and up to 10 percent for handsets with LPDDR5/ LPDDR5x memory. The report also predicts a shortage of DRAM in the coming months as the hardware is used for other applications like AI.
The anticipated rise in component prices may lead to higher smartphone prices, but recent duty cuts on smartphone components could provide some relief to customers, suggests the report. Manufacturers might also mitigate cost increases by offering lower memory configurations on their upcoming smartphones.
This strategy could particularly benefit budget 5G smartphone makers, who have recently started providing higher RAM and storage configurations at competitive prices. By adjusting memory configurations downwards, these companies aim to ensure that base models of their budget handsets remain accessible, priced below Rs. 10,000.
