Apple Faces Growth Challenges in India Amidst Rising Chip Costs and Price Hikes

Apple faces challenges in India as rising chip costs prompt price hikes. Analysts foresee flat or low single-digit iPhone shipment growth this year. Previous generation models will drive sales, but discounts during the festive season are expected to be lower. Consumers may delay upgrades or choose older models due to increased prices and the removal of no-cost EMI schemes.

New Delhi: Apple's plan to increase product prices due to rising memory chip costs may affect its growth trajectory in the Indian market, according to market analysts.

They said the Indian market is likely to see a more significant impact due to currency depreciation and ongoing global cost pressures. As a result, analysts now predict either flat or low single-digit growth for iPhone shipments in the country this year, a downgrade from earlier expectations of double-digit growth in volume.

Also read: Apple to raise prices due to memory chip shortage, CEO Tim Cook says: Report

In India, the company is expected to ship 14-15 million units of iPhones this year, driven by sales of previous generation models. However, reaching that figure will depend on the level of discounts Apple may offer during the upcoming festive season in the second half of 2026.

Market trackers expect sales volume and the extent of discounts offered during the festive season to be lower this year, as most smartphone brands are facing cost pressures due to an increase in component costs.

Costs of memory and storage chips, both essential components in smart devices like smartphones, have increased by 93-98% sequentially in the March quarter, and are expected to have risen by 58-63% sequentially in the June quarter, according to industry tracker TrendForce.

Outgoing chief executive Tim Cook on Thursday told the Wall Street Journal that price increases are unavoidable as current price levels have become unsustainable due to the sharp increases in the cost of memory chips.

While Cook did not specify the products which would be affected, analysts say this will likely be reflected in the upcoming iPhone 18 Pro and Pro Max models, expected to be launched in September.

In India, Apple has also stopped in-store discounts and no-cost financing schemes for the existing iPhone models, said Upasana Joshi, research manager at market research firm IDC India.

"The upcoming Pro models could see a price increase of $50-80 while the Pro Max models might increase by $200-250. Apple is also planning to launch a foldable iPhone, which will be a completely new category and will come at a premium price," Joshi said.

She said Apple has withdrawn its major affordability options, specifically the 12-24 month no-cost monthly instalment schemes that have been stopped since the beginning of 2026. While regular EMI schemes are still available, the removal of the no-cost benefit, an important growth driver for the company, would act as an indirect hit on overall shipments.

Shipment growth may be either flat or in low single digit as co passes on rise in memory cost: Analysts

Joshi now expects iPhone shipments in India to remain flat at around 14 million, revising her earlier forecast of double-digit growth in volume.

That said, buyers of the high-end Pro models are more price inelastic than those buying the base models, and as such, the price hikes will not deter sales of these models, which make up around 30% of total volume for Apple in India, according to IDC.

Also read: US President Trump says Apple to work with Intel to manufacture chips in US

"The end of mass-market affordability options like no-cost EMIs acts as a major dampener on overall shipment momentum for Apple. The end-year sales volume will be highly dependent on supply availability and the extent of discounts on the older iPhone 17 during the festive season," Joshi said.

Sanyam Chaurasia, analyst at Omdia, said a global price hike of 5-10% for Apple could translate to a 15-16% increase in prices in India due to local currency depreciation, component import duties and broader inflation.

Faced with these higher prices, he expects consumers will likely delay upgrades or opt to purchase older generation base models.