Despite a late burst of Diwali shopping, India’s smartphone sales kept sliding. Unit sales over the festival fell nearly 20 per cent YoY, according to the All India Mobile Retailers Association (AIMRA), after shipments dropped 20-26 per cent YoY in Q3 2026 to about 35.8 million units, the lowest third-quarter volume since 2016, according to Counterpoint Research and Omdia.
The slump is less a collapse in demand for phones than a decision to hold on to the one you already have. Counterpoint’s Shubham Singh says consumers became more selective, extended replacement cycles and deferred upgrades.
The reason seems to be price, not a shortage of phones. AI data centres are absorbing a growing share of the world’s memory chips, pushing RAM and storage costs to record highs. Tighter Chinese rare earth export licences make key components costlier to secure, and disruption in the Red Sea and the Strait of Hormuz has stretched delivery times. Handset makers pay more for the memory in every phone, and shoppers can see it on the price tag.
Sub-₹20,000 shipments fell 47 per cent as rising prices pushed models into higher bands. To hold price points, brands are launching more 4G and lower-specification models and trading down specifications in some segments. The traditional mass-market volume engine is under the most pressure, particularly below ₹15,000. Prices have risen, and in some bands specifications have been trimmed, so the same budget buys less phone than before.
Upgrades are holding up mainly among buyers who can absorb higher prices. Samsung reclaimed first place with a 17 per cent share and was the only top-five brand to grow YoY, helped by Galaxy A series volumes and relatively measured price hikes. OPPO recorded triple-digit growth above ₹20,000, and Apple’s iPhone 18 Pro series started with initial sales nearly 20 per cent higher than the iPhone 17 Pro series.
Another round of price hikes is expected once the festive sales end. Analysts expect the market to shrink about 13 per cent in 2026, with a smaller fall likely in 2027 as costlier phones and longer upgrade cycles settle in. With sticker prices rising, brands and retailers will lean on no-cost EMIs, exchange offers and retailer promotions to nudge hesitant buyers into upgrading.
