Smartphone Price Hike: Nowadays, buying a new smartphone can be costlier than before. The main reason for this is believed to be the technology related to Artificial Intelligence (AI). Due to the rapidly increasing use of AI, the prices of essential components like chips and memory have increased significantly. This is the reason why many big tech companies are launching their new devices at a slightly higher price than the old models.
Pressure increases due to expensive memory
According to the report of Indian Express, tech industry experts believe that there has been a huge jump in the prices of memory chips in the last few months. In some cases their prices have increased by 200 to 300 percent. Smartphone companies operate on very low margins, especially in the mid-range and budget segments. In such a situation, when components become expensive, companies are not left with much option other than increasing the price.
AI needs more powerful chips
Running AI technology requires extremely powerful servers and large amounts of memory. Many big AI companies of the world are purchasing huge quantities of memory chips for their data centers. These chips are also used in smartphones and laptops.
RAM is considered to be the short-term memory of any computing device with the help of which multiple apps can run simultaneously. RAM is used in almost every digital device from smartphone, tablet, laptop to car infotainment system. But AI servers require much more high-speed memory than ordinary devices, which has led to a sudden increase in demand.
Limited companies make RAM
There are very few RAM manufacturing companies in the world. Mainly Samsung, SK Hynix and Micron have captured this market. When AI companies start buying memory in large quantities, the supply for other electronics companies becomes less. In such a situation, prices go up rapidly.
Increased impact on smartphone companies
Lack of RAM is affecting almost all phone brands, although big companies can handle this pressure to some extent. Companies operating in the premium segment have higher profits and stronger supply chains. But this situation becomes more difficult for companies making small brands or low-cost phones.
Recently many companies have increased the prices of their new smartphones. Even in the mid-range segment, new models are seen to be costlier than old phones. This clearly indicates that rising memory prices are affecting the entire market.
Most affected mid-range and budget phones
In India, phones priced between 20 thousand to 50 thousand rupees are sold the most. But this segment is under the most pressure at this time. Companies making budget smartphones may have to either increase the price or cut down on features. In some cases, companies may try to control the price by providing less RAM or using older processors.
what will happen in future
Experts believe that memory shortage is not going to end soon. It takes two to three years to build a new chip factory. Therefore, RAM prices may remain high in the future also. In such a situation, it is possible that both smartphones and laptops may become expensive in the coming years. The faster AI technology progresses, the more pressure can be seen on hardware.
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