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Chinese brands dominate the Indian smartphone market, occupying four of the top five spots as their low-cost, feature-rich handsets appeal to cost-conscious Indian consumers.
But as memory prices soar and Chinese phone makers pass on the cost, customers are starting to gravitate toward premium brands like Samsung and Apple because financing options improve affordability.
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big story
Rising costs for memory chips are having a contrasting effect on the fortunes of low-cost Chinese brands and mid-range and premium US and South Korean smartphone companies in India, the world’s second-largest market by volume.
Experts told CNBC that this is the end of smartphones under $150, adding that once current inventory is exhausted, new products in the category with similar features will have to be priced much higher to account for rising memory costs.
Neil Shah, co-founder of Counterpoint Research, said new Chinese cell phone models in India could cost between $200 and $250, up from less than $150 previously. Brands in the sub-$150 category have already increased the price of their smartphones by up to 40%, according to market intelligence firm data.
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 by India’s Finance Minister Nirmala Sitharaman on Sunday, February 1, 2026.
Null Photo | Null Photo | Getty Images
Chinese smartphone companies dominate the low-end market with feature-rich products. But it’s becoming nearly impossible for these companies to absorb the rising cost of memory chips while maintaining affordability.
Higher prices will reduce the monetary value of Chinese smartphones for Indian consumers, but at the same time increase the attractiveness of mid-range and premium device brands such as: samsung and apple For the consumer, Shah said.
Market data intelligence firm IDC last week reported that smartphone shipments in India in the first half of 2026 fell to 64.2 million units, with a significant decline in the entry-level segment. Although sales volume decreased by 7.9% year-on-year, the value increased by 3.6% as the average selling price reached a record of $315.
IDC said in a report that sales, especially for Chinese smartphone companies, have fallen significantly as they struggle to convince “price-sensitive buyers” of “higher prices.” On the other hand, the iPhone 17 maintained the top spot in terms of shipments for the first two quarters of 2026.
According to IDC, smartphone shipments in the June quarter fell 13.9% year-on-year for Vivo, 8.5% for Oppo, 10% for Xiaomi, and 14.2% for Realme. Among all major Chinese brands, OnePlus, which serves the high-end category, reported the lowest year-on-year decline of 2.5%.
Upasana Joshi, senior research manager for device research at IDC Asia Pacific, told CNBC that the global memory chip shortage has driven up prices and “entry-level demand, the segment that Chinese brands rely on the most, is being hit the hardest.”
Joshi added that all Chinese brands have experienced significant declines, with Samsung and Apple being the only major companies with “steady growth in market share.” Samsung and Apple’s shipments rose 0.4% and 0.7% in the June quarter, according to IDC.
Chip shortage
During the quarter ended June, the gap between India’s biggest smartphone seller Vivo and second-place Samsung narrowed.
Samsung’s market share increased by nearly 200 basis points in the June quarter, while Apple’s increased by 100 basis points. Vivo’s market share declined by 60 basis points over the same period, according to IDC, and by 140 basis points, as estimated by Counterpoint Research.
Experts say Samsung has a wide portfolio of smartphones in India ranging from $200 to over $800, but it competes with Vivo in the $200-$300 price range.
While South Korean companies have access to in-house supplies of memory chips, Vivo and many other Chinese companies rely on chips from China. media tech, SK Hynix and Samsung, said Counterpoint Research’s Shah.
Last year, when the price of memory chips started to rise, many Chinese smartphone companies moved to chips made by UNISOC, CXMTShah added that while this helped protect market share for a while, the arrangement was not sustainable.
He said CXMT recently raised funding to expand its capacity to serve China’s AI and data center market and directed resources towards high-end products.
According to Counterpoint Research, memory chip prices have quadrupled since September 2025 and are expected to rise further in the coming months.
With smartphone prices rising due to rising memory costs, experts believe the once price-sensitive Indian market could shift towards premium products, especially as budget phones become more expensive and financing options make expensive phones more affordable.
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