Semiconductor shortage triggers rise in smartphone prices

Higher input costs and scarcity of semiconductors have made smartphones dearer, but the demand for mobile phones has also fallen because of the disruption caused by the second wave of the pandemic.

The budget smartphone category in India is currently flooded with multiple options for consumers. While some focus on one or two parameters, others aim at offering an all-round smartphone experience in a budget.

Smartphone prices have started rising because of the global shortage of chips and higher cost of components – a situation that is likely to continue for some time.

"We have witnessed an increase in the cost of the majority of the components used in smartphones such as display panels, back panels, battery packs, etc. over the past few months coupled with global chipset shortage. In addition to this, with the dollar appreciating, this has led to an inevitable increase in the prices of Redmi Note 10 despite our best efforts to absorb the increasing cost," said a Xiaomi India spokesperson.

The company however claimed it would ensure that the products remain accessible for the masses, and that it doesn't plan to make more than 5% profit on any product.

India is the world's second-biggest cellphone manufacturer after China but it relies on imports for chips or semiconductors that power these devices.