India’s smartphone market sees weakest Q1 in years as rising costs hit demand

While the premium segment grew 25 per cent, the affordable segment declined 46 per cent, and the value-for-money segment fell 12 per cent.  Representational pic

India's smartphone market reached its weakest quarterly performance in recent years, with shipments declining 2 per cent (year-on-year) in Q1 2026. Poor performance is mainly driven by a sharp rise in DRAM and NAND flash prices, which pushed up device costs and forced brands to increase pricing, leading price-sensitive consumers to defer upgrades.

According to the CMR ‘India Mobile Handset Market Review' by CyberMedia Research (CMR), the impact was sharply uneven across segments, as per IANS.

While the premium segment grew 25 per cent, the affordable segment declined 46 per cent, and the value-for-money segment fell 12 per cent.

India's smartphone market under clear cost pressure

India's smartphone market entered 2026 under clear cost pressure, largely driven by ongoing memory supply constraints. However, a sharp rise in DRAM and NAND prices has increased device costs, forcing brands to recalibrate pricing across segments.

Furthermore, this has resulted in slower upgrade cycles, said Menka Kumari, senior analyst-Industry Intelligence Group (IIG), CMR.

The impact is most pronounced in the value-for-money segment, where price sensitivity remains high.

While the performance is already declining, the market is undergoing a structural shift. Consumers are becoming more deliberate in their purchase decisions, prioritising tangible value over frequent upgrades, said the report.

As per IANS, the report also highlighted that the feature phone segment deepened its structural decline in Q1 2026. The 2G segment fell 12 per cent YoY, while 4G feature phones collapsed 41 per cent.

India's smartphone market is likely to decline by 10-12 per cent

Going forward, CMR projects a 10-12 per cent full-year decline for India's smartphone market in CY2026, with the affordable and value-for-money segments likely to see continued volume pressure, margin compression, and cautious consumer demand.

Near-term demand will remain uneven, with price-sensitive consumers in the affordable and value-for-money segments deferring upgrades amid sustained cost pressures.

As OEMs intensify their premium focus, a clear gap is emerging in the low-cost smartphone segment (Rs 5000-Rs 150000), which is being left underserved. For smartphone OEMs that can deliver differentiated value at accessible price points. This represents a significant and largely untapped opportunity," said Amit Sharma, Senior Analyst-Industry Intelligence Group (IIG), at CMR.

(With inputs from IANS)