India’s smartphone market is becoming more expensive even as it gets smaller. Smartphone shipments fell 11.1 percent year over year to 33.2 million units in Q2 2026, according to IDC, as the global memory chip shortage pushed up component costs and reduced room for discounts.
The impact was especially severe at the bottom of the market. Shipments of smartphones priced below USD 100 plunged 74.3 percent YoY, shrinking the segment’s share from 15.6 percent to just 4.5 percent. With memory costs making low-cost phones increasingly difficult to sell profitably, brands are cutting back on launches and channel support in this category.
Buyers are spending more, but not necessarily by choice
The squeeze at the entry level is pushing some consumers towards more expensive phones. The USD 400 – USD 600 segment grew 60.3 percent YoY, with its market share nearly doubling from 4.8 percent to 8.6 percent. The USD 100 – USD 200 segment, meanwhile, remained the largest price band at 46.8 percent share, with shipments broadly flat.
The shift has lifted India’s average selling price (ASP) to a record USD 315 (around Rs 30,000), up 14.4 percent YoY. Market value consequently grew 1.7 percent despite the shipment decline. Premium and upper-midrange segments also proved more resilient, with the USD 600 – USD 800 segment holding flat and the USD 800-plus segment declining just 5 percent.
A temporary return of 4G phones is also emerging as a response to rising costs. 4G’s share increased to 11.1 percent as brands use cheaper models to retain price-sensitive buyers, although this may only delay the move towards costlier 5G devices.
Samsung and Apple weather the downturn better
Samsung and Apple were the only major brands to keep shipments broadly flat, while Vivo, OPPO, Xiaomi and Realme all declined. iQOO saw the sharpest drop among the top 10, falling 61 percent. Apple remained the market leader by value with a 27 percent share, while Samsung benefited from its scale and broad portfolio. Chinese brands, which have traditionally relied more heavily on mass-market volumes, faced greater pressure as their core segments contracted.
Online shipments fell 19.8 percent, pushing online share down to 41.9 percent, while offline shipments declined only 3.6 percent. This suggests physical retail and financing could become increasingly important as brands pull back on discount-led online sales.
IDC expects smartphone shipments to decline by more than 15 percent in H2 2026, taking full-year volumes to around 128-130 million units.
