Smartphones, Laptops To Get More Expensive As AI's Latest Victims

Haven't you found yourself complaining about how expensive phones are getting? Well, I have. And I am afraid there's more bad news. Phones are set to get more expensive. In fact, not just phones, any gadget that uses memory chips - so laptops, tabs, gaming consoles like PlayStation, Nintendo etc.

Now, AI has been getting a lot of hate across the world for being directly linked to job losses, polluting the environment and for sparking anxieties around humanity's future in general. It's not exactly winning popularity contests despite promises to cure "all diseases." And this latest development may nosedive its popularity further. Your next phone, laptop or PS5 are set to get more expensive thanks to artificial intelligence taking on a new villain role.

Everybody's Craving Chips

The explosion of AI has resulted in a massive shortage of memory and storage chips, which in turn has skyrocketed their prices. These are the same chips that are used in phones, laptops and gaming consoles. These memory chips are used to transfer data and store information on devices. AI companies use them to help train and run large language models (LLMs), coding agents and other tools and have been gobbling them up. 

The memory-chip market is dominated by three companies: South Korea's SK Hynix and Samsung Electronics and US-based Micron. While the valuations of these companies soar, the consumers are getting the short end of the stick. 

Apple CEO Tim Cook recently warned customers that the next Mac, iPhone, or iPad could be more expensive due to rising memory and storage chips costs. Cook told WSJ last week that price increases are "unavoidable," despite Apple's efforts to absorb chip costs that have risen 4x since last year. He called the situation "unsustainable." Micron's contract prices for one of the most common data-center memory chips rose from $350 to $1,300 in a year, according to Circular Technology, a data-center hardware reseller.

"This unprecedented equilibrium disruption between demand and supply of memories, which contribute 8-12% of the BoM (Bill of Materials) of present-day smartphones, is leaving no option but to go for waves of increase in retail or operating price," according to Techarc, a market research and consulting firm

In fact, smartphone prices have been soaring since November 2025 with some model prices having nearly doubled, per analysts. What's perhaps kept Apple insulated so far is the forward looking contracts with suppliers with a predetermined price for a locked-in period. "Apple and few more T1 (Tier 1) brands across electronics have such contracts which insulate any such price hikes, of course they too have an expiry," Faisal Kawoosa, Chief Analyst and Founder, Techarc told NDTV.

Also read: Apple Executive Says Some Firms Are Building AI Without Regard For Humans

Prices To Soar Further

Analysts believe prices will progressively shoot up over the next couple years as shortages continue. Memory-chip makers are pumping in billions of dollars to add capacity and increase production, but these facilities usually take two to three years to build. Till then AI companies and gadget makers have no other option but to pay up whatever the memory-chip makers demand. And it's a no-brainer that the pain gets passed on to you, the end consumer. 

For Indian consumers the pain may be compounded by the fact that the rupee continues to be under significant pressure. "For India, the situation only compounds further as the rupee versus dollar exchange rate equation is not stabilising. In recent years, the rupee is persistently devaluing against the US dollar by around 5% each year," according to Techarc. Since these chips are dollar purchases, it means the Indian consumer feels the pinch even more owing to the rupee's devaluation.

Independent consumer tech journalist, Prakhar Khanna told NDTV: "Companies like Oppo and Vivo are launching new phones at higher prices already. Vivo launched the X300 FE at the same price as Vivo X300 and I can't see the latter anywhere online, so they replaced their small flagship with a slightly lower-specced model for the same price."

Khanna also expects Samsung's upcoming foldables to be more expensive than last year's models.

A joint report by Trakin Tech and Techarc, released last month showed 48% consumers would postpone their smartphone purchase until prices settle and 6% would opt for second-hand devices.