The big AI demand and its impact on other parts of the industry is going to see people paying a lot more for phones (both new and existing models) this year and for a while. Various brands have already
pulled the trigger with their new phone launches and now we are going to see the impact on the existing stocks and models which is going to pinch our pockets further.
It all stems from this rapid push to get AI to everyone, no matter how much it costs. We have seen quite a lot said about the AI push from tech giants and it seems most people forgot that to keep these AI machines running, they will need hardware, and that excessive demand is forcing a rethink among companies that actually make the components.
The AI Price Impact
As we have said numerous times before, the demand for memory chips has gone up drastically, so much that manufacturers in this space are ready to give up their consumer business and make the components that fetch them a higher price. Even the memory drive prices have shot up by a massive 300 percent in some cases, which shows you the industry-wide impact of the AI era.
You want to buy a phone with 16GB RAM, it might have cost you Rs 70,000 before, but now that 16GB RAM might be Rs 15,000 pricier which forces the brand to go with a 12GB RAM but for the same price.
The Budget Shock
With the prices going up, it seems the whole budget segment is taking a big hit, almost at the extinction level. Ideally you could spend around Rs 10,000 to Rs 12,000 and get a reliable budget Android phone with decent level of hardware and other features.
The phones launching in the last few weeks suggest that the value factor has gone out of the window. And the worst thing about these changes is that you will see the price effect reflected in countries beyond India, with brands in China also confirming the hike in prices across models and segments.
What Next?
People will have to rethink their plans or even the budgets they will be willing to spend on their next phone (or even laptop). Earlier we had suggested buyers to consider going for the older models but the price effect is going to make them costlier as well. So the best thing to do in this case is that people can either prolong using their current devices, and if that is not doable, the big splurge is unavoidable.
