Why are Apple, Samsung and Google raising smartphone prices? Explained

Gone are the days when smartphones from leading tech giants, Apple, Samsung, and Google, used to come under the budget of salaried laymen. The prices have soared so much over the years, making it almost unaffordable for tech-enthusiasts of India, the country with a per capita income of Rs 2,08,090 at current prices. What has changed over the years? Why the iPhone, which used to come within the range of Rs 60k to 70k, now costs around Rs 80,000, while the high-end models are priced over Rs 1 lakh. The answer to this lies in the continuous technological advancements, which have made smartphones more powerful than ever, but have also made them costlier to build.

The rising prices are a result of a blend of expensive components, including the prevalent global shortage of memory chips, growing investments in artificial intelligence (AI), higher manufacturing costs and changing consumer buying patterns.

Prices are going up across brands

The trend is visible across almost every major smartphone maker. Recently, Samsung released its Galaxy S26 lineup, and its prices are comparatively higher than last year's Galaxy S25 series. In India, the Galaxy S26 starts at Rs 87,999, up from Rs 80,999 for the Galaxy S25. The Galaxy S26+ is priced at Rs 1,19,999, compared with Rs 99,999 for its predecessor, while the Galaxy S26 Ultra now starts at 1,39,999, up from Rs 1,29,999 last year. Samsung has, however, doubled the base storage of 256GB across the lineup.

Apple may also raise the prices of its devices. It recently carried out price revision for its MacBook and iPad lineup, increasing the price of the entry-level MacBook Neo to Rs 79,900 from Rs 69,900. The biggest jump was of Rs 70,000, as the price of MacBook Pro 14-inch rose from Rs 1,69,900 to Rs 2,39,900. As per popular reports, the company is set to increase the prices of its upcoming iPhone 18 Pro models by as much as $300 (Almost Rs 30,000).

Google are also in the same boat, as it has confirmed that Pixel devices will become more expensive, after absorbing higher hardware costs for as long as possible.

Memory chip shortage is driving up costs

One of the most notable reasons behind the price rise this year is the shortage of memory chips. The rapid growth of artificial intelligence has significantly increased the demand for high-bandwidth memory (HBM), which is primarily used in AI servers and data centres. As chipmakers have become more keen on producing these high-value memory chips, supplies of conventional DRAM and NAND flash memory used in smartphones have reduced.

The rapid growth of artificial intelligence has significantly increased demand for high-bandwidth memory (HBM), which is primarily used in AI servers and data centres. As chipmakers divert more production towards these high-value memory chips, supplies of conventional DRAM (Dynamic Random Access Memory) and NAND flash memory used in smartphones have been restricted.

The shortage has pushed memory prices sharply higher, increasing manufacturing costs for smartphone makers. As mentioned, Google have recently confirmed that rising memory costs are one of the key reasons the upcoming Pixel 11 lineup will be more expensive. While Apple and Samsung have not explicitly cited memory prices, they are also dealing with the same supply constraints affecting the broader industry.

Artificial intelligence comes at a cost

Artificial intelligence has quickly become the most sellable feature of modern smartphones as from live translation and AI-powered photo editing to intelligent assistants and call summaries; companies are introducing new AI features with every flagship launch. Consequently, these capabilities require more powerful processors, dedicated AI engines and larger amounts of RAM. Developing these AI features costs a company billions of dollars in research and software development, and they find no choice but to recover the cost through higher device prices.

Memory chips are not the only components becoming more expensive. Flagship smartphones now feature advanced processors built using improved and streamlined manufacturing processes, high-resolution OLED displays, sophisticated camera systems, larger batteries and premium materials such as titanium and stronger glass. The cost of all these combined has steadily increased over the years and made the end product more expensive.

Higher manufacturing costs

The cost of manufacturing smartphones has also risen. Labour, transportation, logistics and energy costs are ever-increasing factors. Adding to that, companies are expanding production beyond China to countries like India and Vietnam to reduce supply chain risks. While this strategy strengthens a company's manufacturing, it also contributes to overall costs, and in the end it is the buyers who bear it.

Consumers are holding on to phones longer

This would be a little-known factor, but it has also prompted a massive shift. Unlike a few years back, people are now upgrading their smartphones less frequently than before. Many consumers now replace their devices every three to five years instead of buying a new phone annually. This has affected shipment growth, making manufacturers to focus more on premium devices that generate higher profit margins than selling larger volumes of smartphones.

Longer software support adds to costs

Smartphone makers are also supporting their existing devices for much longer. Apple traditionally provided software updates for older iPhones for several years; for instance, the recent version of iOS 26.5.2 was made available to iPhone 11 as well (the device that was launched back in 2019). Similarly, Samsung and Google now offer up to seven years of Android and security updates on many flagship devices. Delivering software support over such long periods requires continuous investment in engineering, testing and security.

To conclude, it would be imperative to reiterate that rising prices of smartphones are not being driven by a single factor. Instead, they reflect a combination of higher component costs, the ongoing memory chip shortage, growing investments in artificial intelligence, increased research and development spending, higher manufacturing expenses and longer software support.

As AI becomes an even bigger part of smartphones and demand for memory chips remains strong, flagship devices are likely to become more expensive. While companies continue to add new features and improve performance, consumers should be prepared to pay more for premium smartphones in the years ahead.