India's smartphone market sees steepest decline in 5 years
What's the story
India's smartphone market has witnessed its weakest start to a calendar year in five years, with a 12% drop in volume and a 6% decline in value. The first quarter of 2026 saw sales worth about $7.8 billion, which is $500 million less than the same period last year. This downturn comes as consumers are delaying upgrades amid rising living costs and global uncertainty.
Volume decline
Market volume shrinks nearly 12% YoY
The market volume has also taken a hit, shrinking nearly 12% year-on-year (YoY). About 28 million units were sold in the first quarter of this year, down from last year's figure of 32 million, according to Mint. The decline in value was not as steep at 6%, as companies managed to mitigate losses by raising prices in February and March.
Industry concern
Major concern for the industry
The simultaneous decline in both value and volume at the start of a calendar year is a major concern for the industry. Until now, brands had relied on no-interest monthly installments to keep sales of higher-value phones going. But this strategy seems to have hit a roadblock, at least for now. The slowdown coincides with geopolitical tensions affecting financial markets worldwide, pushing up energy prices and dampening consumer sentiment.
Consumer behavior
Brands may have to compromise on margins
Navkendar Singh, Associate VP at International Data Corp (IDC) India, explained how high prices of essential commodities like cooking gas and fuel have increased transportation and basic goods costs. He said that even though smartphones are almost a necessity today, their purchase may not be prioritized until the market stabilizes. This could force brands or retailers to compromise on margins if they want to boost sales and keep industry growth afloat.
Market response
Price hikes by leading smartphone brands
On April 7, Mint reported that all of India's leading smartphone brands raised phone prices by nearly 40% in some cases. The top five brands account for nearly two-thirds of the market and despite these price hikes, a slowdown is likely to impact them due to their broad market exposure. Maintaining value growth is critical for these brands as they navigate nearly five years of market stress in India.
Pricing strategy
Average selling price of smartphones increased
Between March 2022 and March 2026, the average selling price (ASP) of smartphones increased from ₹15,000 to ₹26,000, an annual increase of nearly 12%. Previously, price hikes were offset by no-cost installments making it easier for buyers to afford more expensive devices. But now even the cost of minimum monthly payments are rising pushing buyers toward refurbished phones at lower prices or even repairs.
Supply chain
Memory chip prices spiked due to global supply crunch
Memory chips, a key component in smartphones, saw their prices more than double in Q4 2025 due to a global supply crunch. Analysts now expect these prices to remain elevated. Harshit Kapadia, VP at brokerage firm Elara Capital, said while memory chip costs will come down, it's unlikely the entire price spike will be reversed.