Your Next Smartphone Will Be Expensive Thanks To This New Chip Crisis

Are

you looking to buy a new smartphone? If you are in the market to purchase an affordable smartphone, you either might have to face fewer options or deal with higher prices. A worsening global memory is putting pressure on the smartphone manufacturers, leading analysts to predict the sharpest annual decline ever recorded in mobile shipments. The situation is likely to affect consumers in developing markets, where budget devices remain the most popular option.

Smartphone Market Set for Historic Drop

As per Counterpoint Research, global mobile shipments are likely to fall 13.9 per cent this year to nearly 1.08 billion units. The latest forecast is worse than the company's earlier estimate, which was around a 12.4 per cent decline.Moreover, the research group has said that the shortage of memory chips has become more critical in recent months. Supply challenges have also been worsened by disruptions linked to the Iran war, adding further strain to the global technology supply chain.

Budget Phones Hit The Hardest

Notably, the biggest impact is being seen in the lower-priced mobile segment. Several chip makers are reportedly allocating more production capacity to AI-related chips, which are currently high in demand. As a consequence, producing affordable smartphones has become more expensive. Counterpoint has highlighted that some models priced below $150 (Rs 14,275) may eventually disappear as existing inventories run out. Wholesale smartphone prices have already been rising by 14 per cent during the first quarter, even as shipments declined compared to the same period last year. As budget-friendly smartphones are under pressure, premium brands seem to be coping better with the supply challenges. Apple has reported strong revenue growth in the first quarter, helped by demand for its latest iPhone 17 series. Counterpoint expected Apple’s shipments to remain stable this year before returning to growth next year. It is noteworthy that the mobile slowdown highlights how the growing race for AI technology is changing the electronics industry. As chipmakers begin to prioritise hardware, consumer products such as smartphones may become more expensive and less accessible.