AI memory crunch drives India's smartphone shipments down 10%

Memory chipmakers Samsung, SK Hynix, and Micron have been shifting production capacity toward high-bandwidth memory (HBM) — the specialized chips AI accelerators need — because it is far more profitable per wafer than the standard RAM and storage used in phones and laptops, leaving less capacity and higher costs for consumer electronics. India, the world’s second-largest smartphone market by shipments after China, is showing the clearest fallout: shipments fell 10% year-over-year in the April-June quarter, the steepest June-quarter decline in six years, Counterpoint Research said, as higher memory costs pushed up handset prices. China’s shipments fell just 2% over the same period.

India has been hit harder because about 60% of its smartphone market sits in the sub-₹20,000 (under $210) segment, where higher memory costs have the biggest effect on price, Counterpoint vice president of research Tarun Pathak told TechCrunch. The sub-₹15,000 (under $150) segment fared worse still, with shipments down 45% year-over-year, while Chinese brands — heavily exposed to entry- and mid-tier phones — saw their combined India market share fall to its lowest level for a second calendar quarter since 2020. Samsung was the only major brand to post India shipment growth in the quarter, up 2% year-over-year, while Apple’s shipments fell 3% — a dip Counterpoint attributed to supply constraints rather than weaker demand. Smartphone prices in India have risen between 4% and 68% depending on the model, Pathak said, pushing consumers toward higher-priced devices, delayed upgrades, or the secondhand market, with replacement cycles stretching to around four years from about 3.5 years previously.

The pressure is also reshaping strategy: OnePlus said this week it would stop launching new products in Europe and North America while keeping its India business, after what it described as a careful assessment. IDC expects India’s shipments to decline by double digits in the quarter, a steeper fall than the 4.1% drop in the first quarter, associate research director Kiranjeet Kaur said, cautioning that the estimate was not yet finalized. She added that memory shortages and elevated prices are likely to persist until at least the end of 2027. “For Indian consumers, it is a double whammy as the weaker currency makes imports costlier, which has added to margin pressures for the market players, and they are passing on the cost to the consumer,” Kaur told TechCrunch.

Why it matters

India’s slump is an early, concrete signal that AI’s chip demand is spilling over into everyday consumer electronics prices — a dynamic likely to persist in other price-sensitive smartphone markets as memory costs stay elevated into 2027.