India’s smartphone market declined 11.1 per cent year-on-year to 33.2 million units in the April-June quarter of 2026, according to data from International Data Corporation (IDC). The decline follows a 4.1 per cent year-on-year fall in the first quarter, extending the slowdown in the market into the second quarter.
Combined, the January-June period recorded total shipments of 64.2 million units, down 7.9 per cent from the same period a year earlier. IDC said this was the lowest first-half shipment volume for India’s smartphone market in five years, even as the overall market value increased 3.6 per cent year-on-year.
According to IDC, higher component costs continued to reshape India’s smartphone market in the quarter, leaving manufacturers and distribution channels with significantly less room to cut prices without eroding margins.
The pressure was most acute in the entry-level segment, where sustaining profitability in devices priced under $100 became increasingly difficult. As a result, brands reduced model launches and channel support, leading to a sharp 74.3 per cent year-on-year fall in shipments in this category. Its market share contracted from 15.6 per cent to just 4.5 per cent, underscoring how the entry-level tier is rapidly becoming commercially unviable under current cost conditions.
At the same time, a temporary uptick in 4G demand emerged as entry-level 5G devices became more expensive. Several brands reintroduced or extended 4G models to retain presence in the segment, lifting 4G’s share to 11.1 per cent. However, IDC noted this is largely a supply-led stopgap, with the shift expected to be short-lived. Once existing inventory is exhausted, consumers are likely to move towards higher-priced 5G devices, making the current rise in 4G share a temporary cushion rather than a structural recovery in affordability.
The squeeze at the bottom of the market also triggered a clear upward migration in consumer demand. Buyers priced out of entry-level devices moved into higher segments, with the $400–600 band growing 60.3 per cent year-on-year and nearly doubling its share from 4.8 per cent to 8.6 per cent. The mass-budget segment ($100–200), which remains the largest at 46.8 per cent share, held relatively steady with flat shipments, reinforcing its position as the new value anchor for cost-conscious consumers. In contrast, the $200–400 segment declined 8.1 per cent year-on-year, while the $600–800 band remained flat and the $800+ segment slipped 5.0 per cent, with both higher tiers gaining share as demand consolidated away from the lower end of the pyramid.
IDC said this resilience in premium and upper-mid segments reflects sustained demand from upgrade-led and aspirational buyers, who have so far remained relatively insulated from affordability pressures affecting the lower end of the market.
Distribution channels also reflected the shift in demand dynamics. Online shipments fell 19.8 per cent year-on-year, with their share declining from 46.4 per cent to 41.9 per cent, as e-commerce-led discounts and promotional offers became significantly less aggressive than a year earlier. The impact was most visible in the shrinking presence of entry-level models online and the absence of upfront discounts on flagship devices.
In contrast, the offline channel proved more resilient, with shipments declining just 3.6 per cent year-on-year. Brands increasingly leaned on physical retail networks to manage pricing pressure and sustain volumes in a market where affordability constraints and reduced discounting have reshaped buying behaviour across segments.
Smartphone prices rise as memory costs increase
Average selling prices (ASP) of smartphones in India rose 14.4 per cent year-on-year in the second quarter to a record $315, according to IDC. The research firm said the increase reflects the impact of higher memory costs across smartphone portfolios.
“Q2 2026 saw average selling prices climb 14.4 per cent year over year to a record $315, with memory driven cost pressure showing up across the product lineup,” said Aditya Rampal, senior research analyst, Devices Research, IDC Asia Pacific.
Rampal said this was a reversal from the same period last year, when brands and retailers began offering festive discounts and promotions early to build demand ahead of the festive season.
This year, higher component costs have left manufacturers and channels with less room to reduce prices without affecting margins. As a result, price increases have replaced early discounting as brands attempt to protect profitability.
Apple and Samsung gain as market contracts
The decline has not affected all smartphone brands equally. Apple and Samsung have been able to maintain their positions as brands with premium portfolios and scale, while several other manufacturers have seen shipments decline, noted IDC.
Vivo remained the largest smartphone brand in India by shipments in Q2 2026, with an 18.4 per cent share. Samsung ranked second with a 16.4 per cent share, up 0.4 percentage points from the same quarter last year.
Apple, meanwhile, ranked sixth in the quarter, compared with fourth in the first quarter. Despite the change in ranking, Apple increased its share of shipments to 8.5 per cent in Q2 2026, from 7.5 per cent in the same quarter last year.
Apple’s iPhone 17 was the highest-shipped smartphone model in India during the first half of 2026, according to IDC.
IDC attributed Samsung’s performance to its scale and diversified portfolio, which allowed the company to absorb higher costs while maintaining shipment volumes and margins.
The contrasting performance of brands shows that the market slowdown is not being distributed evenly. Companies with stronger positions in premium and ultra-premium segments are better placed to deal with higher component costs, while brands dependent on lower-priced devices and shipment volumes face greater pressure.
Chinese brands face pressure in mid-range segments
Chinese smartphone manufacturers have been among the brands most affected by the slowdown. Several leading Chinese brands have a larger presence in the mid-range, upper mid-range and mass-market segments, where consumers are more sensitive to price increases.
Screenshot source: IDC Worldwide Quarterly Mobile Phone Tracker, August 2026
IDC said these manufacturers faced greater exposure to rising memory costs because of their dependence on the low-end and mass-market segments. Several leading Chinese brands recorded double-digit shipment declines during the quarter as demand shifted towards companies with greater scale and more stable supply chains.
The shift also highlights the growing importance of financing as smartphone prices rise. IDC said financing options offered by companies such as Apple and Samsung could reduce the effective price gap between premium devices and lower-priced segments, potentially helping maintain demand for higher-priced smartphones.
Future outlook
The pressure on prices is expected to continue into the second half of 2026. IDC expects price-sensitive Indian consumers to remain under pressure as smartphone average selling prices remain elevated and brands reduce discounting to protect margins.
The absence of early festive discounts could become particularly significant as manufacturers and retailers enter the second half of the year.
“This year, both brands and channels have leaned away from that (early festive discounts and offers) playbook, thinning margins have left little room to use price as a demand lever, pushing prices higher instead of lower,” said Rampal.
He said financing options would be important during the festive season to keep smartphones within reach of consumers.
“Heading into the festive season, financing options will be key to keeping affordability within reach, alongside product differentiation in the mid-premium segment, to sustain consumer demand,” he added.
With smartphone shipments declining while average selling prices reach record levels, the second half of 2026 is likely to test whether financing and premiumisation can offset weaker demand in the mass-market segments.
 "Apple, Samsung hold ground as India's phone shipments fall 11.1% in Q2: IDC")
