Sub-Rs 20,000 smartphone market may be heading to a 'collapse' and reason is the 'most

Why are budget phones facing a bigger squeeze

How is the AI boom affecting sub-Rs 20,000 phones

Could this make smartphones harder to afford in India

The decline in the sub-$200 smartphone segment reflects a broader structural shift in the market rather than a single factor. Rising memory, chipset and other component costs are putting greater pressure on entry-level smartphones, where margins are already thin and consumers are highly price sensitive. The AI data-centre boom is adding to this pressure, particularly through strong demand for DRAM and NAND, tightening memory supply and pushing memory prices up nearly fourfold, with prices expected to approach 5x soon. This is translating into higher smartphone prices or lower memory configurations, particularly in budget devices. At the same time, premiumization and longer replacement cycles are reducing demand for low-cost smartphones, as consumers either trade up, hold on to existing devices for longer or delay purchases. This could make smartphone adoption more challenging for first-time buyers in developing markets, while creating opportunities for refurbished and pre-owned devices that offer better specifications at lower prices. Globally, the refurbished smartphone market is expected to grow 14% YoY in 2026, while in India, we expect it to grow 16% YoY. Brands with greater exposure to the mass-market sub-INR 20,000 segment are likely to face the most pressure, as they have less room to absorb higher costs without raising prices or compromising specifications. However, financing, promotions, trade-ins and older-generation models can help cushion the affordability impact.

Could refurbished phones become the new budget option