Chip squeeze hits Chinese smartphones as Apple, Samsung gain an edge
Hello, this is Priyanka Salve, writing to you from Singapore.
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Chinese brands dominate the Indian smartphone market, claiming four out of the top five spots, as their low-priced and feature-rich phones appeal to the cost-conscious Indian consumer.
But as memory prices surge and Chinese phone-makers pass on those costs, customers are beginning to gravitate toward premium brands such as Samsung and Apple, as financing options improve affordability.
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The big story
Rising memory chip costs are having a contrasting effect on the fortunes of budget Chinese brands and mid-market and premium American and South Korean smartphone companies in India, the world’s second-largest market by volume.
It is the end of the sub-$150 smartphones, experts told CNBC, adding that after the current inventory is exhausted, newer launches with similar features in this category will have to be priced much higher to account for the rising memory costs.
Newer Chinese phone models in India could cost anywhere between $200 and $250 compared to under $150 earlier, according to Neil Shah, co-founder at Counterpoint Research. As per the market intelligence firm’s data, brands in the sub-$150 category have already raised smartphone prices by up to 40%.
Samsung mobile phones are displayed for sale at an electronics store in Srinagar, Jammu and Kashmir, on January 31, 2026. The Union Budget 2026-27 is scheduled to be presented on Sunday, February 1, 2026, by India’s Finance Minister Nirmala Sitharaman.
Nurphoto | Nurphoto | Getty Images
Chinese smartphone companies dominate the budget segment with their feature-rich products. But it has become nearly impossible for these companies to maintain affordability while absorbing the rising costs of memory chips.
Higher prices diminish the value-for-money proposition of Chinese smartphones among Indian consumers, but at the same time, it increases the appeal of mid-price and premium handset brands like Samsung and Apple for consumers, Shah said.
Market data intelligence company IDC reported last week that smartphone shipments in the first half of 2026 in India dropped to 64.2 million units, with the entry-level tier seeing a steep decline. While sales volume fell 7.9% year on year, in terms of value they grew 3.6% as average selling price hit a record of $315.
Sales of Chinese smartphone companies, in particular, fell sharply as they struggled to convince “price-sensitive buyers” of their “higher price tags,” IDC said in its report. Meanwhile, iPhone 17 remained the top-shipped device consecutively for the first two quarters of 2026, it said.
In the June quarter, smartphone shipments of Vivo fell 13.9%, Oppo declined 8.5%, Xiaomi dropped 10%, and Realme crashed 14.2% from a year ago, as per IDC. Among all major Chinese brands,…
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