Smartphone Costs Jump in Karachi as AI Fuels Memory Price Spike

Karachi mobile retailers have lifted phone prices by Rs15,000-Rs30,000, pushing basic smartphones beyond the reach of many shoppers.

NationPulse Desk

Oct 26, 2026 · 9:36 AM 2 min read

Key takeaways

Karachi phone retailers lifted prices by Rs15,000-Rs30,000 per handset.

A budget phone that cost Rs20,000 last year now sells for over Rs30,000.

Manufacturers link the rise to higher RAM and ROM costs driven by AI growth.

Shopkeepers say sales have fallen sharply as consumers struggle to afford new phones.

Buyers are turning to used or kit phones amid price hikes and supply shortages.

All major mobile phone brands have increased smartphone prices in Karachi by Rs15,000 to Rs30,000 per handset, making new devices unaffordable for many, especially those seeking budget models.

A low-end phone with 4GB RAM and 64GB storage cost about Rs20,000 last year; today it sells for over Rs30,000, and some shopkeepers quote Rs35,000-Rs40,000 for similar specs.

Smartphones now serve education, work, banking, online transport, government services and family contact. With new devices out of reach, many buyers are turning to used phones or kit phones - refurbished units imported in bulk without retail packaging to dodge heavy customs duties - though they are seen as less reliable.

Consumers blame rising government taxes and the US-Iran conflict, which they say have disrupted trade and component exports. Traders and manufacturers point to a different cause.

Karachi Electronics Dealers Association President Muhammad Rizwan Irfan argued that taxes have not increased enough to explain the sharp price jump, attributing the rise mainly to higher chip costs.

Mian Abdul Rehman of the Pakistan Mobile Phone Manufacturers Association told Dawn that RAM and ROM prices have surged because of rapid AI growth, including AI systems, robotics and data centres.

He noted that memory production has lagged behind demand, and that memory prices were relatively stable before the AI expansion, making it harder for manufacturers to absorb the added expense.

Shopkeepers reported that the price hike has drastically cut their sales. One said customers can no longer afford phones that have risen from Rs20,000 to Rs30,000 or Rs35,000, while another warned of market uncertainty due to ongoing price swings and supply shortages.

Consumers interviewed by Dawn urged the government to act to keep basic smartphones affordable, insisting that digital services should not be limited to those who can pay high-priced handsets.

A buyer at Sareena Mobile Market in Buffer Zone remarked that the government promotes "Digital Pakistan" while the cost of the device needed to access its services keeps climbing, and suggested the government arrange a deal with a manufacturer to supply affordable basic phones.

At Saddar Mobile Market, a man shopping for his daughter's college phone said the model he wanted rose from Rs22,000-Rs23,000 in August to about Rs30,000, and increased again the next month, prompting him to consider a used or keypad phone.

A working woman at the same market said she had to dip into her savings to purchase a phone. In Abdullah Mobile Market in North Karachi, a young man whose phone was stolen the night before said he could not locate a decent handset for Rs25,000-Rs30,000 and might have to buy a used or keypad phone.

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