Smartphone Prices Rising in India: Why 5G Phones May Get Costlier

September 29, 2026: A few years ago, a good 5G smartphone could be bought in India for around Rs 10,000. At this price, buyers could get decent performance, a large battery, a good camera and enough RAM and storage. However, that has changed. New 5G smartphones are now moving towards the Rs 15,000–20,000 price range.

So, why are smartphone prices increasing? Is artificial intelligence (AI) responsible, or are companies simply passing higher costs to customers? Market data suggests that there are several reasons, including rising memory prices, higher production costs and changing business strategies.

Vivo shows the change in smartphone prices

The change can be seen in Vivo's T series. The Vivo T4 Lite 5G launched in 2025 with a starting price of Rs 9,999, while the Vivo T5 Lite 5G launched in 2026 with a starting price of Rs 19,999.

The two phones have different specifications, so this does not mean the price of the same phone has doubled. However, the example shows the pressure on the budget smartphone segment. Similar changes can also be seen in phones from Samsung, Realme, Poco and Xiaomi.

Why are RAM and storage prices increasing?

Memory is an important part of a smartphone. DRAM is used for RAM, while NAND flash memory is used to store apps, photos, videos and other data. Rising prices of both types of memory have increased smartphone production costs.

According to Counterpoint Research, rising memory prices are having a major impact on low-cost smartphones. The Bill of Materials (BOM), which covers the cost of the components used to make a phone, has increased significantly for budget devices.

This means companies now have to spend more to produce smartphones with similar hardware. They can either absorb the higher cost, reduce features, cut profit margins or increase the selling price.

Is AI responsible for higher smartphone prices?

AI is one factor behind the increase in memory demand. Companies such as Google, Microsoft and Amazon are building large data centres to run AI services. These facilities require large amounts of memory, including advanced technologies such as High Bandwidth Memory (HBM).

Higher demand from AI and data centres can put pressure on the supply of memory, which can increase prices. This can indirectly affect smartphone production costs. However, AI is not the only reason for higher phone prices. Processor, display, camera, battery, transportation and marketing costs also affect the final price.

Budget smartphones face the biggest pressure

Phones priced below Rs 15,000 are facing some of the biggest challenges. According to market research, smartphone shipments in India fell by 10 percent year-on-year in the second quarter of 2026, while shipments of phones below Rs 15,000 declined by around 45 percent.

Shipments refer to the number of phones sent to the market, not direct consumer purchases. Still, the figures show the pressure on the budget segment. Buyers may now have to keep their existing phones for longer, spend more or compromise on features.

Phones around Rs 10,000 are still available, especially older models and devices sold with discounts. However, finding a phone with 5G, a good display, enough RAM and storage, a good camera and a large battery at this price is becoming more difficult.

Phone prices are rising while shipments are falling

The Indian smartphone market is also seeing a rise in average selling prices. According to IDC data, smartphone shipments in India fell 4.1 percent year-on-year to around 31 million units in the first quarter of 2026. At the same time, the average selling price increased to $302, up 10.4 percent from a year earlier.

Counterpoint Research also reported that shipments of smartphones priced above Rs 30,000 increased by 11 percent in India in 2025. Their share of total smartphone shipments reached 22 percent.

This does not mean every consumer is moving to expensive phones. For budget buyers, even an additional Rs 2,000–3,000 can make a significant difference.

Will good 5G phones still be available for Rs 10,000?

It is too early to say that good 5G phones will completely disappear from the Rs 10,000 segment. India continues to have strong demand for affordable smartphones, so brands are unlikely to leave this market completely.

However, buyers may see fewer feature-rich 5G phones at this price. Some customers may have to compromise on storage, cameras, displays or performance. Discounts, older models and festive offers could still provide some relief.

Will smartphone prices increase further?

Counterpoint Research has predicted that smartphone shipments in India could decline by around 13 percent in 2026. Rising memory costs remain another concern for manufacturers.

However, it is difficult to say that every smartphone will become more expensive. Bank offers, exchange bonuses, festive discounts and price cuts on older models can help buyers. If production costs fall or competition increases, prices could also become more competitive.

Overall, rising memory costs are an important reason behind higher smartphone prices. Growing AI and data-centre demand is adding pressure to the memory market, but production costs, competition and company pricing strategies are also playing a role.