Handset biz fading on chip price spike

India's smartphone market is facing a significant downturn, with projections indicating a potential contraction of over 13% this year. This decline is largely attributed to a sharp increase in memory chip prices, which are expected to drive up device costs by 15-40%. Such price hikes are making smartphones less affordable for budget-conscious consumers, consequently affecting small retailers who rely on volume sales. Retailers reported a staggering 35% drop in sales in February 2026, and experts predict that the situation may worsen in March, traditionally a slow sales month due to fiscal year-end expenditures. Navkendar Singh from IDC India forecasts a decrease in smartphone shipments from 152 million units last year to 132 million by 2026, indicating a troubling trend for the industry. The All India Mobile Retailers Association (AIMRA) highlighted that major brands have raised prices by up to 30% since November, with the absence of traditional quarterly discounts compounding the issue. This has led consumers to postpone purchases or turn to the second-hand market. If current trends continue, entry-level smartphones priced at ₹10,000 could reach ₹20,000 by year-end, posing further challenges for retailers and manufacturers alike.