India Smartphone Shipments Decline
The Indian smartphone market is facing a significant downturn, recording its weakest performance in five years during the first half of 2026. According to industry data, smartphone shipments in Q2 2026 plummeted by 11.1% year-on-year, totaling 33.2 million units. This decline is largely attributed to escalating memory costs, which are forcing manufacturers to raise prices and shift their product portfolios towards more expensive devices.
The average selling price of smartphones in India also saw a substantial increase, rising 14.4% year-on-year. This indicates a broader market shift where consumers are finding fewer options in the entry-level segment, and the cost of new devices is climbing across the board.
Budget Phones Vanish from Shelves
The most severe impact of this market transformation is felt in the budget smartphone category. Data for Q1 showed that shipments of devices priced under $100 (approximately Rs 8,300) fell by a staggering 59% year-on-year. Their market share dwindled from 18% to a mere 8%, highlighting a significant reduction in the availability of truly affordable smartphones.
Manufacturers are struggling to sell inexpensive smartphones profitably due to the rising costs of key components like DRAM and NAND memory. This pressure is leading brands to cut discounts, increase prices, and prioritize higher-margin models, leaving consumers with fewer choices for budget-friendly devices.
Brand Performance and Market Shifts
The challenging market conditions affected most major brands. Vivo, despite retaining its position as India's largest smartphone brand, saw its Q2 shipments drop by 13.9%. Xiaomi, Oppo, and Realme also experienced declines of 10%, 8.5%, and 14.2%, respectively, while iQOO faced an even sharper 61% fall.
However, some brands managed to defy the trend. Samsung's shipments grew marginally by 0.4%, and Apple recorded a 0.7% increase, boosting their respective market shares to 16.4% and 8.5%. Motorola and OnePlus also showed relatively better performance compared to their competitors.
4G Phones Make an Unexpected Comeback
An interesting side effect of the rising prices for entry-level 5G phones has been the resurgence of cheaper 4G smartphones. Their share of India's smartphone shipments nearly doubled, increasing from 5.8% in Q1 to 11.1% in Q2, as manufacturers reintroduced lower-cost 4G models to provide more affordable alternatives.
Consumer buying habits are also evolving. Online smartphone shipments fell by 19.8%, while offline shipments declined by a more modest 3.6%. This shift increased the offline channel's market share to 58.1%, suggesting a preference for in-store purchases despite the overall market contraction.
Outlook Remains Challenging
Industry analysts warn that the sub-$100 segment is becoming economically unviable globally due to structurally higher memory prices. Experts anticipate India's smartphone shipments to fall by more than 15% in the second half of 2026, indicating that the affordability crisis for smartphones in India may deepen before any relief is seen.