AI-driven memory crunch jolts India’s smartphone market
TechCrunch Jagmeet Singh
AI's hunger for memory chips is now hitting phone prices in India, hard. Shipments dropped 10% as budget handsets got squeezed by the same RAM shortage feeding data centers.
Based on reporting by TechCrunch, Jagmeet Singh — read the original for the full story.
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Six months ago this was an analyst's warning. Now it's a chart. India's smartphone shipments fell 10% year-over-year in the April-June quarter, the steepest June-quarter drop in six years, and Counterpoint Research is pointing straight at memory chips as the culprit. Not a subtle one, either.
Here's the mechanism: Samsung, SK Hynix, and Micron make the RAM and storage that go into phones. They also make high-bandwidth memory for AI accelerators, and that stuff prints money per wafer in a way ordinary phone memory never will. So capacity has been quietly migrating toward AI chips for months, squeezing supply — and inflating prices — for the boring memory that powers a ₹15,000 Android phone.
India got hit worse than China, where shipments only dipped 2% in the same quarter, because roughly 60% of India's market lives under ₹20,000 (about $210). That's exactly the price band where a memory-cost bump does the most damage. Counterpoint says the sub-₹15,000 segment cratered 45% year-over-year. Chinese brands, which dominate that entry tier, saw their combined India market share drop to its lowest point for a second quarter since 2020.
Samsung was the only major brand to grow shipments in India this quarter, up 2%, largely because premium buyers shrug off price hikes when financing spreads the pain. Apple actually fell 3%, though analysts chalk that up to supply constraints rather than demand. Meanwhile OnePlus just announced it's pulling out of new product launches in Europe and North America entirely, doubling down on China and India instead — a retreat that Counterpoint's Tarun Pathak says comes down to simple math: sub-brands need volume to justify thin margins, and that volume isn't there anymore.
IDC's Kiranjeet Kaur frames this as a shift from volume growth to value growth — fewer phones sold, more revenue per phone — and expects the squeeze to last until at least 2027. Indian buyers are already adapting: stretching upgrade cycles toward four years, leaning harder on financing, or shopping secondhand. A weaker rupee just makes imported components pricier still, so brands keep passing costs downstream. Nobody's ditching smartphones. They're just holding onto the old one a little longer.
My take — AI-written commentary, not fact-checked reporting
This is the AI boom's tax bill finally showing up in someone's pocket, and it's the poorest smartphone buyers on Earth paying first. Chipmakers chasing HBM margins didn't set out to punish budget Android users in India, but that's exactly what's happening, and it's a preview of how AI infrastructure spending quietly reroutes resources away from ordinary consumer tech everywhere. Watch for this pattern to hit every price-sensitive market next, not just India.
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