Explained: Why smartphone prices are on the rise in 2021 – Times of India

about two weeks ago, Xiaomi The price of Redmi Note 10 series has been increased. Three days ago, realme increased the price of its four Smartphones Whereas Micromax also increased the price of a smartphone today. The increase in the price of these smartphones may not be significant but it does indicate a trend: smartphone prices continue to rise. Let’s take a look at why the prices of smartphones have increased.
Global shortage of smartphone components
While smartphone shipments are on the rise and are expected to increase further in 2021, there has been a shortage of components. according to a report from canalis“As key components, such as chipsets and memory, increase in price, smartphone vendors must decide whether to absorb that cost or pass it on to consumers.” This was in July and since then the cost seems to have been passed on to consumers. Most of the price hikes have happened in the budget or entry-level segment. According to Canalis, there are major obstacles around LTE The chipset, which has created a challenge at the lower end of the market.
Another research firm gartner believes that the global chip shortage has yet to hit the smartphone industry as demand-supply balance is met. “This may change in the coming quarters and result in an increase in the average selling price of smartphones globally,” the firm said.
Rising prices of smartphone components
earlier this year, Xue Qi, Vice President, Realme also warned about the increase in the prices of the smartphones. In addition to the shortage of 4G processors, the prices of components for charting adapters, memory chipsets and others have gone up. Qi said that this price increase has increased the cost of manufacturing the smartphone by at least 10%, which will eventually reach the end consumer.

Xiaomi President Zhang Wiang warned about this in March. He added that the company will try to optimize cost but only to a certain extent and beyond to reach the consumers. Low cost handsets are more affected as the margins on them are very less.
5G: Another reason for inflation
As more countries adopt 5G-enabled networks and 5G phones gain popularity, the cost of smartphones is expected to increase further. With users turning to devices that support 5G, the demand for these smartphones is bound to increase. As we have seen with budget 5G smartphones in India – even if the technology is not available – the price is high. Once 5G arrives in India, there will be a huge demand and people will have to pay extra for that technology.