- Smartphones are becoming expensive due to lack of storage and memory chips.
- A possible decline of more than 22% in the shipment of cheap phones this year.
- Chip manufacturers reduced consumer production due to increasing demand for AI.
- Companies had to increase the price or reduce the features of the phone.
Smartphone Price Hike: Due to shortage of storage and memory chips, prices of phones of every segment, from cheap to expensive, are increasing. Cheap phones are continuously becoming expensive and companies are struggling to launch new cheap phones. For this reason, fear is being expressed that cheap phones may disappear from the market. The prices of phones which were considered cheap till some time ago, have increased by thousands of rupees and buying them has now become expensive.
There will be a decline in the shipment of cheap phones
According to the latest report of Omdia, the shipment of phones priced below $ 400 (approximately Rs 38,000) is likely to decline by more than 22 percent this year. The biggest reason behind this is the lack of storage and memory chips. Now due to AI features, more memory is being required in phones, but due to shortage of these chips, it has become difficult for companies to make such phones. Their margins have already reduced and now they cannot provide all the features in the phone without increasing the price.
Efforts to keep prices low are no longer working
According to reports, companies are constantly trying to keep prices low. For this, cheap display panels, camera sensors and radio components are being used, but now there is no scope left for further reduction. This is the reason why companies like Oppo, Xiaomi and Vivo have to make their phones expensive or reduce the features to prevent the price from increasing.
Why is there a shortage of memory chips?
After the AI boom, the demand for storage and memory chips for data centers has increased. To accomplish this, chip manufacturing companies reduced the production of chips used in the consumer market i.e. laptops and smartphones etc. Now his entire focus is on making chips for AI data centers. Due to this, there was a shortage of chips for devices like smartphones etc. Due to increase in their prices, the costs of the companies started increasing. Omdia’s report shows that in the first quarter of this year, 60 percent of the companies’ expenses in phones priced below Rs 38,000 were being spent only on purchasing memory chips. This shows how difficult it has become for companies to make cheap phones.
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