Smartphone shipments in India declined sharply in the second quarter of this year. Analysts recorded a 10% drop compared to last year. This is the worst result for this period in the last six years. The main reason lies in the global boom of artificial intelligence. Major memory chip manufacturers have switched their production facilities. Now they are releasing high-speed memory for servers and data centers. Because of this, components for regular phones have become sorely lacking. The cost of memory chips has increased by almost 300% in a year. In budget models, these parts now account for more than 65% of the cost. India has been affected by this situation more than other countries. About 60% of the local market is occupied by devices priced up to $ 210. It was in this segment that the price increase hit customers the hardest.

Sales of the cheapest smartphones have fallen by almost 45%. The share of Chinese brands in the Indian market has fallen to its lowest levels since 2020. Samsung was the only major manufacturer to show growth in this region. Shipments of Apple devices also declined slightly. However, this was due to a shortage of gadgets themselves, not a drop in demand. Overall smartphone prices in the country have increased in a wide range from 4% to 68%. Indian residents are now using their old devices much longer. The average phone replacement cycle has stretched from 3.5 to 4 years. A significant part of the buyers were forced to switch to the secondary market of equipment. A weak national currency further aggravates the situation, making the import of components even more expensive.

This crisis has affected the entire global consumer electronics industry. Global smartphone shipments decreased by 11% in the second quarter. This is the lowest figure since 2013. Chinese brands showed a double-digit drop due to their focus on the budget segment. Meanwhile, Samsung has regained its global leadership with a 24% share. Experts predict that memory shortages and high prices will persist at least until the end of 2027. The crisis is already forcing large companies to radically rethink their business strategies. For example, the OnePlus brand has announced the abandonment of new launches in Europe and North America. At the same time, the company decided to keep its business in India, as it is its largest market outside of China.