India’s budget smartphone market nearly halves as memory costs deepen decade-low slump

Indian smartphone shipments fell 20% in the third quarter, with sales of handsets priced below Rs 20,000 plunging 47% as higher component costs weakened affordability.

India’s smartphone market has sunk to its weakest third quarter in a decade, with Counterpoint Research saying shipments fell 20% year on year in the three months to September 2026 as rising memory costs pushed up handset prices and dampened demand. The research firm said brands also kept channel inventories lean ahead of the festive buying period, a sign that manufacturers were already bracing for softer sales.

The sharpest contraction came in the mass market. Counterpoint said shipments in the sub-Rs 20,000 bracket dropped 47% in Q3, as higher component costs lifted entry-level prices and eroded affordability. Research analyst Shubham Singh said the pressure was especially acute below Rs 15,000, where price-sensitive buyers normally account for a large share of volume.

The firm’s outlook suggests the weakness is unlikely to clear quickly. Tarun Pathak, research director at Counterpoint, said the Indian market is on track to shrink by about 13% in 2026, with pricing pressure continuing to weigh on replacement demand. He added that the post-festive slowdown and a further round of price increases after seasonal sales are likely to keep volumes under strain.

Manufacturers are already adjusting their portfolios to defend prices. Counterpoint said brands are increasing their use of 4G and lower-specification models, while cutting features in some segments to hold retail price points. The firm expects the market to remain difficult in 2027, with growth shifting towards premium and upper-mid devices as the mass market stays constrained by affordability pressures and thinner OEM margins. It said no-cost EMIs, exchange offers and retailer promotions will become more important as buyers look for ways to absorb higher upfront costs.