HMD warns affordable smartphones may fade as component costs rise until 2027

HMD India-APAC CEO Ravi Kunwar has warned that the era of affordable smartphones may be ending due to rising component costs, particularly memory prices driven by AI demand. The company launched the Vibe 2 Pro 5G in India at ₹14,999 but cautioned that cost pressures could keep prices elevated until at least the end of 2027.

Rising costs threaten affordable smartphones

According to Mint, the era of ultra-affordable smartphones may be under pressure due to rising costs of memory and other components. HMD India-APAC VP and CEO Ravi Kunwar highlighted that smartphone component prices, particularly memory, have increased significantly over the last six months.

The surge in memory prices is largely driven by growing demand from artificial intelligence (AI) applications. Kunwar warned that these cost pressures could persist until at least the end of 2027, making it difficult for manufacturers to sustain lower price points.

HMD launches Vibe 2 Pro 5G in India

In response to these challenges, HMD launched the Vibe 2 Pro 5G in India, targeting the value-conscious segment. The device is priced starting at ₹14,999 for the 6GB RAM variant and ₹16,999 for the 8GB RAM model. Sales begin on October 8 during Flipkart’s Big Billion Days sale.

The sub-₹20,000 price segment remains critical in India, accounting for 40% of the smartphone market. Kunwar emphasized that HMD is prioritizing practical features, such as a 6,000mAh battery, and local AI integration tailored for Indian consumers, rather than engaging in a price war.

Focus on local AI and market expansion

HMD is positioning itself as more than just an entry-level smartphone brand. The company aims to integrate AI into everyday consumer experiences, particularly beyond major metropolitan areas in India. Partnerships with local players like Sarvam AI are part of this strategy.

Kunwar also stated that HMD is working to expand its portfolio across all smartphone segments, signaling a shift from its traditional focus on budget devices.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

HMD’s warnings about rising component costs reflect a broader challenge for the smartphone industry, particularly in markets like India where affordability drives adoption. If memory prices remain elevated due to AI demand, manufacturers may struggle to keep devices accessible to price-sensitive consumers. This could slow down market growth or push brands to innovate in other areas, such as battery life or localized software features, to justify higher prices.

For founders and operators, this trend underscores the importance of balancing cost pressures with consumer expectations. Brands that prioritize practical, high-value features—rather than just competing on price—may stand out in a market where affordability is no longer a given. HMD’s focus on local AI integration also highlights an opportunity to differentiate by addressing region-specific needs, particularly in emerging markets.

Key takeaways

• Smartphone component costs, especially memory, have risen significantly due to AI-driven demand.
• Affordability challenges may persist in the smartphone market until at least the end of 2027.
• HMD is targeting the sub-₹20,000 segment with the Vibe 2 Pro 5G, emphasizing practical features and local AI support.
• The sub-₹20,000 price band dominates 40% of the Indian smartphone market, highlighting its importance.

FAQ

Why are smartphone component costs rising?

Smartphone component costs, particularly memory prices, have increased due to growing demand driven by artificial intelligence (AI) applications. This demand has created supply constraints, pushing prices higher.

How long are these cost pressures expected to last?

According to HMD India-APAC CEO Ravi Kunwar, cost pressures in the smartphone industry may persist until the end of 2027.

What is the significance of the sub-₹20,000 smartphone segment in India?

The sub-₹20,000 price segment accounts for 40% of the Indian smartphone market, making it a critical segment for manufacturers targeting value-conscious consumers.

How is HMD addressing affordability challenges in India?

HMD is focusing on practical features, such as a 6,000mAh battery, and local AI integration in its devices, like the Vibe 2 Pro 5G. The company is avoiding a price war and instead aims to offer enhanced value to consumers.

What is the starting price of the HMD Vibe 2 Pro 5G in India?

The HMD Vibe 2 Pro 5G starts at ₹14,999 for the 6GB RAM variant and ₹16,999 for the 8GB RAM model.

Related on Lazyfounder

• Flipkart
• More technology news
• Samsung launches Galaxy Tab S12, Smart Tag 3, and One UI 9 with AI and customization upgrades