The upcoming festive season in India may see fewer discounts on smartphones as rising memory prices, prompted by AI infrastructure demands, push manufacturers to increase retail prices and shift focus to financing deals.
India’s festive smartphone season, usually the high point for discounts and exchange deals, is likely to look less generous this year. According to reporting cited by ET, manufacturers are facing a sharp increase in memory and other key component costs, making it harder to offer the heavy price cuts that have often accompanied Diwali and other holiday sales. The pressure is not confined to one market: Gartner has forecast an 8.4% fall in global smartphone shipments in 2026, after warning that a 130% rise in DRAM and SSD prices could lift handset prices by around 13% versus 2025 levels.
The cost shock is being driven in large part by artificial intelligence. Memory makers such as SK Hynix, Samsung and Micron are prioritising specialised chips for AI infrastructure, tightening supply for the more standard memory used in phones and other consumer devices. Gartner said this shift is already altering upgrade cycles as buyers face fewer affordable options and keep existing devices for longer. TrendForce has similarly projected that global smartphone output could fall by 10% in 2026, with a bear-case scenario pointing to a contraction of 15% or more if memory prices remain elevated.
The impact is now visible in retail pricing. According to the report, Realme, Oppo, Vivo, Samsung and OnePlus have all raised the prices of selected models, with some increases running into several thousand rupees. Apple has also pushed up pricing in India for certain iPhones, including a higher sticker price for the 256GB iPhone 17 than at launch. Industry research from Counterpoint and other analysts suggests memory has become a much larger share of the bill of materials, especially in entry-level devices where margins are already thin.
That leaves manufacturers with less room to compete on outright discounts. Instead of blunt price cuts, this festive season may rely more heavily on no-cost EMI, cashbacks, exchange bonuses and bank-linked offers. ET’s report says financing is becoming more important to handset sales in India, with NBFC-led and card-based EMI purchases expected to account for about 42% of smartphone buying in 2026, up from 35% in 2025. For premium buyers in particular, the value of exchange schemes may rise as older phones become a bigger part of the upgrade decision.
For consumers, the practical effect is straightforward: promotions may still be available, but the balance is shifting away from large headline discounts towards structured financing and trade-in value. That is a significant change for a market where festive sales have long depended on aggressive offers to trigger upgrades. If memory prices remain high through the third quarter, as some market watchers expect, the result could be a more expensive festive season and a slower year for smartphone sales overall.
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