Spike in memory prices: Smartphone market could shrink more than 13% this year

New Delhi: India’s smartphone market could shrink more than 13% this year, as a sharp increase in memory cost is expected to drive up device prices by 15-40%, making them out of reach for many budget customers and pushing small shop owners out of business, retailers and experts said. Falling sales and rising cost could also hurt the margins of smartphone companies, particularly smaller local brands, industry experts said.

The impact was already visible in February when sales slumped 35%, retailers told ET. It will remain the same or get worse in March, traditionally a weak month for sales as customers often have less disposable money after making income tax and other fiscal-year-end payments, they said. With memory chip prices set to rise further and supplies fall short, they expect further damage in the coming quarters.