The Market Takes a Hit
India's smartphone market just hit a rough patch. The 10% drop is a sharper fall than China saw, where shipments slipped just 2% over the same period.
The pain is concentrated where most Indians shop. Roughly 60% of the market sits in the under ₹20,000 (under $210) price range. And the cheapest phones are getting crushed - shipments of models under ₹15,000 (under $150) fell 45% year over year.
Consumers are reacting exactly how you would expect. They are holding on to their phones longer, stretching the replacement cycle from about 3.5 years to 4 years. Others are turning to the secondhand market. Financing plans have become a key way to keep new phones affordable.
Why Phones Are Getting More Expensive
Three leading memory producers - Samsung, SK Hynix, and Micron - are diverting their manufacturing focus from standard DRAM and NAND chips, which typically go into smartphones and laptops, toward high-bandwidth memory chips designed for AI accelerators. Those AI chips are way more profitable, so manufacturers are chasing the money. The result: less supply of standard memory, which drives up prices for phone makers, who then pass the cost to you.
Price hikes vary by model but range from 4% to 68% depending on the phone.
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"Sub-brands normally have overlaps and shared resources, and you need a minimum base to justify the cut-throat margins," said Tarun Pathak, a vice president at Counterpoint Research. "Profitability is the key to deciding market operations."
For Indian consumers, it gets worse. Kiranjeet Kaur, an associate research director at IDC, called it a double whammy: a weaker currency makes imports costlier, squeezing margins for brands, which then push those costs to shoppers.
Winners and Losers Among Phone Brands
Not every company is hurting the same way. Samsung actually grew shipments in India by 2% in the second quarter. Apple's shipments fell 3% in the quarter, hindered by production bottlenecks and stock deficits that restricted the number of iPhones it could ship.
Chinese brands as a group lost ground. The combined market share of Chinese brands in India dropped to a new low for a second consecutive calendar quarter, the weakest since 2020. OnePlus is a clear example - its share of global shipments going to India dropped from 30% to 19% in the first quarter, while its China share jumped from 59% to 74%. OnePlus has announced it will no longer introduce new devices in European and North American markets, signaling a retreat from less profitable regions.
Analysts expect more budget-focused brands to follow that pattern. When margins are razor thin and prices keep rising, the math stops working for the cheapest players.
The bottom line: This is not a temporary blip. IDC forecasts a double-digit decline for India's full second quarter. The first quarter already fell 4.1%, and the quarter before that dropped 5.3%.
What This Means for Your Wallet
On the downside, the main driver of higher phone prices is structural. Memory chip makers are chasing AI profits, leaving less capacity for standard chips. That imbalance is not expected to ease soon; analysts at IDC and Counterpoint predict elevated memory costs through at least the end of 2027. So do not expect a quick return to cheap phones.
The slightly better news: the pace of price increases should slow as buyers get used to the new normal. But that still means you will likely pay more for your next phone, or you will hold on to your current one even longer.
For anyone in India - or anywhere watching similar trends - the takeaway is practical. If you need a new phone soon, expect to pay a premium. If you can wait, the secondhand market is getting more attention. And if you are already on a financing plan, that trend is not going away.
The real shift here is structural. AI is hungry for memory chips, and that hunger is reshaping everything downstream - including the phone in your pocket.
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