• Average cost of mobile phone with 4GB RAM and 64GB storage has risen to around Rs40,000 compared to Rs22,000 a few months ago
• Dealers say while govt taxes have not increased significantly, rising cost of chips is affecting rates of new handsets
• Market survey shows lower, middle-income groups hit hardest
• Consumers say abrupt price hike hampers connectivity in digital age

KARACHI: A sharp rise in mobile phone prices in the city has made new smartphones almost unaffordable for a large number of consumers as all major mobile phone brands have increased prices by Rs15,000 to Rs30,000 per handset.

The increase has hit particularly hard those who could previously afford “budget smartphones”.

The budget smartphone can be described as a device with bare minimum features needed to function reliably for daily essentials, such as 4GB of RAM and 64GB of storage. While it used to cost around Rs20,000 until last year, it is now priced above Rs30,000, and, therefore, has gone out of reach for many.

Consumers wonder why the prices have gone up so much. Some think it is because of the taxes imposed by the government while others say it is so because of the US-Iran war that has affected international trade and, with that, export of mobile phone components.

For a vast majority, education, work, online transport services, banking, government services and communication with family members are linked to smartphones and, therefore, having a reliable phone is essential.

Due to a steep hike in prices, a large number of buyers have no option but to buy used phones available on the market or kit phones, which are refurbished sets imported in bulk without retail packaging to avoid heavy customs duties.

However, many believe that used or kit phones do not offer the same reliability which a new smartphone does.

Shopkeepers said the unprecedented increase in mobile phone prices had not only made life more difficult for consumers, but had also severely affected their businesses.

One shopkeeper said: “When a phone costing Rs20,000 rises to Rs30,000 or Rs35,000, many consumers can no longer afford it. Our sales have fallen drastically following the increase in prices.”

Another shopkeeper said the market was currently facing uncertainty because of continued price fluctuations and a shortage of supply.

The ‘reason’ behind price hike

The Karachi Electronics Dealers Association president, Muhammad Rizwan Irfan, said that there had been no significant increase in taxes to affect the price so much.

He said mobile phone prices had increased mainly due to the rising cost of chips.

Similarly, Mian Abdul Rehman of the Pakistan Mobile Phone Manufacturers Association told Dawn that mobile phones were becoming increasingly expensive mainly because of the rising cost of RAM (random access memory) and ROM (read-only memory).

He said demand for memory components had increased significantly with the rapid growth of artificial intelligence (AI) technology, including its use in AI systems and robotics and data centres. However, their production had not increased at the same pace as consumption.

“AI companies are buying RAM and ROM at very high prices, which is driving up their cost,” he said.

Mr Rehman said memory device prices had remained relatively stable before the rapid expansion of AI, but the situation had changed with the growing demand from AI-related industries.

He said mobile phone manufacturers were finding it increasingly difficult to absorb the higher cost of memory components. “That’s why there has been such a significant increase in mobile phone prices,” he added.

Consumers seek govt intervention

Perturbed by the jacked-up prices, consumers Dawn spoke to are calling on the government to take measures to keep smartphones with basic specifications within the reach of ordinary citizens, arguing that access to digital services should not become limited to those who can afford increasingly expensive handsets.

They said mobile phones are an essential part of everyday life rather than merely a means of communication or entertainment.

A customer at Sareena Mobile Market in Buffer Zone said phones are a basic necessity in everyday life.

“On the one hand, the government talks about a ‘Digital Pakistan’, but on the other, the price of the very device through which ordinary citizens access essential government and other digital services continues to rise,” he said, adding: “The government should take measures to keep the prices of basic smartphones affordable, so that people can access essential government apps and other digital services.”

Another customer suggested that the government enter into an agreement with a mobile phone manufacturer to make basic smartphones available to consumers at affordable prices.

A man, who had come to Saddar Mobile Market to buy a new phone for his daughter, who just started college, told Dawn that he realised after visiting the market that buying a new smartphone was out of his budget.

“When I came to buy the phone in August, I found that the price of the model I wanted had risen from Rs22,000-Rs23,000 to around Rs30,000. When I asked the shopkeeper about the increase, he told me that there might be problems with imports, which had pushed up the mobile phone prices.

“With my salary and the current inflation, I could not afford an additional Rs7,000 to Rs8,000 all at once, so I decided to wait until the following month and save some more money. But the price has increased further this month. Now I have only two options: either buy a used smartphone or a keypad mobile phone, because a new smartphone is now beyond my means,” he said.

A woman at the same market said rising phone prices had forced her to spend money from her savings to buy a new smartphone. “It is my compulsion to purchase a mobile phone at an inflated price as I am a working woman and need a phone in good condition,” she said.

Speaking to Dawn at North Karachi’s Abdullah Mobile Market near UP Mor, a young man said: “My mobile phone was snatched last night near KDA Chowrangi. I have come to the market to buy a phone, but even for Rs25,000-Rs30,000, I cannot find a decent handset on which essential everyday apps can run properly.”

He said: “Previously, a reasonably good phone with 4GB RAM and 64GB storage could be bought for Rs20,000-Rs22,000, but shopkeepers are now quoting Rs35,000-Rs40,000 for phones with similar specifications. Under these circumstances, I may now have to settle for a lower-quality handset, start using a keypad phone that can only make calls and send SMS messages, or buy a used phone.”

Published in Dawn, October 26th, 2026