AI-driven memory crunch jolts India's smartphone market
India's smartphone slowdown highlights how the AI boom is reshaping consumer electronics, from pricing and demand to corporate strategy. Months after analysts warned that AI-driven demand for memory chips would ripple through consumer electronics, India is providing the strongest evidence yet that the disruption has arrived, with rising handset prices reshaping the smartphone market. The memory chips in question - RAM and storage components - are the same ones tech giants need by the truckload to build AI data centers.
Key Takeaways
- Manufacturers like Samsung, SK Hynix, and Micron have been shifting production capacity toward high-bandwidth memory, the specialized chips used in AI accelerators, because they're much more profitable per wafer than the standard memory used in phones and laptops - leaving less capacity, and driving up costs, for everyday consumer electronics.
- The South Asian nation, home to more than 1.
4 billion people and over 700 million smartphone users, has become a bellwether for consumer demand in price-sensitive markets, making shifts in buying patterns closely watched by device makers, chip suppliers, and investors tracking the broader health of the AI supply chain.
- The uneven impact is already reshaping competition among smartphone makers.
Samsung was the only major smartphone brand to post shipment growth in India in Q2, with volumes rising 2% year-over-year, according to Counterpoint.
- Shipments in the sub-₹15,000 (under $150) segment fell 45% from a year earlier, Counterpoint said.
Because Chinese brands are heavily exposed to entry- and mid-tier smartphones, their combined market share fell to its lowest level for a second calendar quarter since 2020.
- In other words, OnePlus is retreating to markets where it can still turn a profit and ceding ground elsewhere - a pattern likely to repeat across other budget-focused brands as margins tighten.
Stats & Key Facts
- #India, the world's second-largest smartphone market by shipments after China, saw smartphone shipments fall 10% year-over-year in the April-June quarter, according to market research firm Counterpoint Research, marking the steepest June-quarter decline in six years as higher memory costs pushed up handset prices.
- #India has been hit harder because about 60% of its smartphone market is concentrated in the sub-₹20,000 (under $210) segment, where higher memory costs have had the biggest impact on prices, Tarun Pathak, the firm's vice president of research, told TechCrunch.
- #4 billion people and over 700 million smartphone users, has become a bellwether for consumer demand in price-sensitive markets, making shifts in buying patterns closely watched by device makers, chip suppliers, and investors tracking the broader health of the AI supply chain.
- #Shipments in the sub-₹15,000 (under $150) segment fell 45% from a year earlier, Counterpoint said.
Manufacturers like Samsung, SK Hynix, and Micron have been shifting production capacity toward high-bandwidth memory, the specialized chips used in AI accelerators, because they're much more profitable per wafer than the standard memory used in phones and laptops - leaving less capacity, and driving up costs, for everyday consumer electronics. India, the world's second-largest smartphone market by shipments after China, saw smartphone shipments fall 10% year-over-year in the April-June quarter, according to market research firm Counterpoint Research, marking the steepest June-quarter decline in six years as higher memory costs pushed up handset prices. The impact has been more pronounced in India than in China, where smartphone shipments fell just 2% in Q2, according to Counterpoint.
India has been hit harder because about 60% of its smartphone market is concentrated in the sub-₹20,000 (under $210) segment, where higher memory costs have had the biggest impact on prices, Tarun Pathak, the firm's vice president of research, told TechCrunch. India has been a prominent market for global smartphone brands for several years. The South Asian nation, home to more than 1.
4 billion people and over 700 million smartphone users, has become a bellwether for consumer demand in price-sensitive markets, making shifts in buying patterns closely watched by device makers, chip suppliers, and investors tracking the broader health of the AI supply chain. Pathak told TechCrunch that consumers are unlikely to abandon smartphones altogether. However, many of them are expected to delay upgrades, stretching replacement cycles to around four years from about 3.
For more details please read the original article at TechCrunch AI.
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