India Smartphone Market Hit by Worst Quarter in 6 Years — Budget Segment Plunges 45% on Soaring Memory Prices

A toxic combination of surging component costs and weakening consumer sentiment has pushed India — long hailed as the “land of opportunity” in the global smartphone market — into a severe demand cliff. Second-quarter smartphone shipments in India recorded their steepest decline for the April-June period in six years, sounding alarm bells across the industry.

According to Counterpoint Research’s monthly India Smartphone Tracker released on July 22, smartphone shipments in India fell 10% year-over-year in the second quarter. That marks the largest drop for a June-ending quarter since 2020.

The primary culprit behind the downturn is the explosive rise in memory semiconductor prices. The cost of memory chips used in smartphones has roughly quadrupled since September of last year, with projections pointing to a potential fivefold increase in the coming months. As a result, memory’s share of the bill of materials (BoM) for budget smartphones priced below 15,000 rupees (approximately $180) has ballooned from under 20% to more than 45%.

Unable to absorb the component cost pressure, manufacturers have been forced to raise prices in quick succession. By the end of the second quarter, the average selling price (ASP) of smartphones in the Indian market had climbed approximately 15%, with some models seeing price hikes exceeding 100% compared to their launch prices. Compounding the problem, macroeconomic uncertainty and persistent inflationary pressures have severely dampened real replacement demand.

The budget segment bore the brunt of the price increases. Shipments in the sub-15,000 rupee category plummeted 45% year-over-year. Consequently, the combined market share of Chinese brands — which have a heavy presence in the budget and mid-range segments — fell to its lowest level for a second quarter since 2020. Chinese manufacturers are scrambling to respond, with some expanding their 4G product lines to target price-sensitive consumers until component costs stabilize.

In contrast, the ultra-premium segment, where equated monthly installment (EMI) financing programs are well established, maintained relatively stable demand. Installment financing, which lowers upfront purchase costs, now accounts for more than 50% of mainstream sales, effectively cushioning the impact of price hikes.

By brand, vivo held the top spot with an 18% market share, buoyed by the launch of its premium V70 model. However, overall shipments for the brand still declined by double digits due to price increases across its budget Y and T series.

Samsung Electronics (005930.KS) was the only brand among the top five to post year-over-year growth, gaining 2% to secure second place in market share. Analysts attributed the performance to solid demand for the Galaxy A series and flagship S25 and S26 models, along with extensive summer discount promotions. Counterpoint noted that Samsung narrowed the gap with vivo while recording the only growth among the major players.

OPPO held third place with a 14% share, followed by Xiaomi at 13% and realme. Both brands saw shipments decline due to price increases on models priced below 20,000 rupees (approximately $240).

Apple (AAPL) recorded a 7% market share, with shipments falling 3% as inventory shortages across online and offline channels offset demand for the iPhone 17 series.

Elsewhere, Nothing posted the highest growth rate among tracked brands, surging 105% year-over-year on strong new product reception. Google also grew 68% in the ultra-premium segment, aided by its price-freeze policy.

“With memory component costs continuing to rise, we forecast India’s annual smartphone market will contract 13% year-over-year in 2026,” said Tarun Pathak, Director at Counterpoint Research. “Given that component price normalization is unlikely before next year, smartphone makers are expected to focus on expanding premium lineups through financing programs and optimizing their portfolios, rather than chasing the increasingly low-margin budget segment.”