West Asia conflict | Here's how your smartphones could get expensive due to prolonged flight disruptions

Although air freight is more expensive than shipments by sea, global Original Equipment Manufacturers (OEMs) rely heavily on air transport for time efficiency, as smartphones must reach stores soon after announcements.

In a double whammy, the smartphone industry, which is already reeling from RAM and storage chip shortages, may face further disruptions in shipments due to the prolonged conflict between the US, Israel, and Iran.

Although air freight is more expensive than shipments by sea, global Original Equipment Manufacturers (OEMs) rely heavily on air transport for time efficiency, as smartphones must reach stores soon after launches and announcements.  

Most of the smartphones assembled in China and India are transported via flights to the Middle East, Europe, Africa and the Americas. 

Usually, Dubai International Airport in the UAE and Hamad International Airport in Qatar serve as major technical stops and cargo transshipment hubs.

These airports enable cargo consolidation and redistribution before shipments continue to Europe, Africa or the US East Coast.

If the war prolongs any further, smartphone makers will have to look for alternative routes, resulting in rise in prices.

“If disruptions persist, overall logistics expenses continue to rise, including insurance adjustments and extended groundhandling time. While these increases may appear insignificant when spread across an aircraft carrying hundreds of thousands of smartphones, the added cost is layered onto an already thin per-unit logistics allocation. As a result, even small absolute increases can translate into meaningful percentage increases per device, gradually pressuring smartphone margins, pricing strategies and inventory planning across global markets.,” said Ahmad Shehab, Research Analyst, Counterpoint Research.

Prolonged conflict may force smartphone makers to shift towards Central Asian hubs like Tashkent to ship products to Europe.

Westbound cargo to the US East Coast may route via East Asia and North America. For African and some regional markets, alternatives such as Addis Ababa and Egypt may be used. However, these adjustments would be a shift from efficiency to resilience.

Additionally, rerouting may cause additional two-three hours flight time, leading to more fuel consumption worth up to $25,000 (approx. Rs 22, 97,604).

It should be noted that for longer detours extending total flight time to 12 to 14 hours or more, may force flight companies to double flight crews, to meet crew rest regulations.

This may potentially add another $24,000 (approx. Rs 22,05,699) or more in labour costs.

Established players such as Apple and Samsung hasve readjusted the prices of smartphones for bigger base models (with 256GB storage) in smartphones.

Thanks to bigger brand value, they are likely to sustain loyalty among consumers. But, smaller players, which sell mid-range phones will face the most brunt this year.

As per latest trends, smartphone shipments, particularly those priced $100 (around Rs 9,190) -$399 (roughly Rs 36,669) are likely to see around seven percent decline.

However, the premium segment ($799+, approx. Rs 73,431) is expected to see growth around four per cent increase, as per Omdia’s latest outlook. 

Smartphone makers are expected to face supply constraints beyond 2026 and in 2027, as semiconductor companies are expected to continue prioritise RAM and storage chipset shipments to Artificial Intelligence (AI) data centres.

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