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Is memory chip crunch wiping out ₹10K smartphone market in India?
| Photo Credit: Reuters
As memory chip crunch is forcing brands to repeated price hikes across smartphone segments, the budget tier seems to be facing an existential crisis as the margin in this segment has always been the thinnest. As per an IDC estimate, nearly 173 million sub-₹10K smartphones, which shipped last year, are facing an existential crisis. In Q2 2026, this segment [below $100 smartphone] saw an almost 60% year-over-year (YoY) drop. The decline is expected to continue for the rest of this year.
Memory prices are soaring with over 300% YoY increase, per IDC, and the trend is expected to continue until 2028. Smartphone makers will eventually move to a mid and premium segments to minimise the cost burden and help the market grow in value over volume.
“To make a ₹10,000 phone now, you have to first buy a memory worth ₹4,000 to ₹4,500 and then think of adjusting BoM (bill of material) like display, SoC, camera, battery and then also make some room for margins which look extremely difficult. Hence, it won’t be wrong to say that sub-₹10k category staring at a complete wipeout unless someone sells them at loss or change business model,” says Tarun Pathak, Research Director at Counterpoint. He added that this segment will under immense pressure for the next 18 months. “Some older phones may still be sold or even second-hand phones will find [a place] in sub-₹10,000 [segment].”
The segment’s share has dropped from 19% in Q2 2025 to just 4% in Q2 2026, and sales has declined 81% YoY. Even the ₹10,000–₹20,000 segment has declined 7%, as some devices are now moving above ₹20,000 following price hikes. This is gradually reshaping the affordable smartphone market, with consumers having to compromise on specifications or stretch their budgets to access better devices.
