Expensive new iPhone, price hikes on old may dent Apple volume, not revenue

Apple is raising prices across its iPhone portfolio as smartphone demand weakens, but India's premiumisation trend could help protect its revenue growth, says analysts

Apple's decision to launch the iPhone Duo at Rs 299,900 in India, alongside substantially higher prices for the iPhone 18 Pro series, comes at a time when the country's broader smartphone market is shrinking. Yet Apple is entering this difficult market from a position of unusual strength: it has been gaining value share even as overall shipments have come under pressure.

 

At first glance, the timing appears challenging. Smartphone demand is under pressure globally, component costs are rising and consumers are becoming more cautious about spending on expensive electronics. India, too, is not immune to these pressures, with the overall smartphone market expected to contract sharply this year.

 

 

Yet Apple's India story is increasingly less about how many iPhones it sells and more about the value generated from each device.

 

That distinction could become particularly important in 2026. While Apple's iPhone volumes in India are expected to decline, analysts believe the company's revenue can still grow as consumers continue to gravitate towards more expensive models.

India is becoming a value market for Apple

Apple has built a different position in India compared with the broader smartphone market. According to Navkendar Singh, analyst with International Data Corporation (IDC), Apple's average selling price in the country has remained above $800, while the overall smartphone market operates at an average of roughly $150-250.

 

The difference is significant because it shows where Apple's strength lies. The company does not need to compete for the bulk of India's smartphone shipments to increase its share of the market's value. 

 

IDC expects Apple's iPhone shipments in India to decline in single digits in 2026 from 14.3 million units in 2025. That is a relatively modest decline compared with the broader smartphone market, which IDC expects to shrink by more than 15 per cent this year to around 125-128 million units from 152 million in 2025.

 

In other words, Apple could sell fewer iPhones while still performing considerably better than the overall market.

 

This is where India's premiumisation story becomes important.

 

Tarun Pathak, research director at Counterpoint Research, said Apple had already grown 2 per cent year-on-year between January and July 2026, while its Pro series grew 32 per cent during the same period. Counterpoint expects Apple's India volumes to decline by only low single digits for the full year, while revenue could still grow 6-7 per cent.

 

The difference is being created by the mix of devices being sold. Counterpoint expects Pro models to account for around 15 per cent of Apple's sales by the end of 2026, compared with 11 per cent in 2025. As consumers move towards higher-priced models, Apple's revenue can grow even when unit volumes do not.

The global economy may hit volumes more than value

This distinction could become increasingly relevant if economic uncertainty continues to weigh on global smartphone demand. When consumers become cautious, the first impact is usually visible in unit demand. Replacement cycles can lengthen, entry-level purchases can be postponed and buyers can become more selective about spending.

 

But premium consumers do not necessarily behave in the same way. Apple has increasingly positioned the iPhone as a premium product rather than simply another smartphone. In India, this strategy is supported by a growing consumer base willing to pay for higher-end devices, particularly when financing, exchange offers and other affordability mechanisms reduce the upfront cost.

That does not mean Apple's premium customers are immune to economic pressure. Rather, it means the impact on Apple's business can be different from that on the broader smartphone market.

 

A decline in units does not necessarily translate into a decline in revenue if the average selling price rises at the same time. That is effectively what Apple appears to be experiencing in India.

iPhone Duo pushes the value equation further

The iPhone Duo takes this strategy to an extreme. At Rs 299,900, it sits well above the traditional premium smartphone category and creates a new price point for Apple's portfolio. But its immediate importance is unlikely to be measured by how many units Apple sells.

 

Prabhu Ram, vice-president, Industry Research Group, CMR India, describes the Duo as an "uber-premium" tier above the existing ultra-premium smartphone segment and primarily a halo product that can help lift Apple's overall portfolio average selling price (ASP).

 

That makes the Duo less important as a volume product and more important as a signal of where Apple believes the premium smartphone market can go.

 

India's foldable market is still tiny compared with the broader smartphone market. IDC estimates that around 626,000 foldable smartphones were shipped in India in 2025. Even with foldable volumes expected to grow more than 25 per cent in 2026, the category will remain a small part of the overall market.

For Apple, however, the opportunity is not necessarily about selling millions of Duo units immediately. It is about capturing value from consumers willing to pay a substantial premium for a new form factor, while strengthening the perception of the iPhone as a premium lifestyle product.

Pathak expects the Duo to expand India's foldable market primarily by value rather than volume in its initial phase. Early demand is likely to come from Apple loyalists and technology early adopters who have been waiting for a foldable iPhone.

The Duo's price has another explanation

There is also an important distinction between the Duo's price and the price increase across the iPhone 18 Pro range. The Duo is initially being imported into India, meaning its price is affected by import duties, goods and services tax (GST) and currency movements. Pathak estimates that these factors together can create a net impact of more than 40 per cent, including the 17 per cent import duty, 18 per cent GST and the impact of a weaker rupee.

 

CMR's Ram also points to memory-cost inflation, rupee depreciation, customs duties, local tax structures and channel margins as factors behind the higher pricing. So the Rs 2.99 lakh price tag should not be interpreted entirely as Apple's margin expansion. But the more interesting signal is what Apple is doing with the rest of its portfolio.

Apple is raising the ceiling while protecting the value mix

CMR expects the iPhone 18 Pro lineup to be around 20-22 per cent more expensive than the previous generation, reflecting higher component costs and other pricing pressures. At the same time, the traditional pattern of a new base iPhone arriving alongside the Pro models has changed. The base iPhone 18 could reportedly move to the March quarter, while the existing iPhone 17 remains part of Apple's portfolio at a higher price than previous entry points.

 

This matters because Apple is effectively changing the price architecture of its iPhone range.

Consumers who might previously have considered the latest standard model now have fewer lower-cost ways of entering the new-generation iPhone portfolio. Those who want the latest hardware at launch are increasingly being directed towards the Pro models.

 

That could further raise Apple's ASP even if overall unit demand softens.

Affordability will still matter

None of this means Apple can raise prices indefinitely without consequences. India remains a highly price-sensitive market, and the wider smartphone slowdown demonstrates that consumers are already under pressure. Apple's ability to sustain value growth will therefore depend partly on how effectively it can make higher prices manageable.

 

Trade-ins, financing and promotional offers are likely to become increasingly important, particularly during the festive season.

Counterpoint expects refurbished iPhone demand to also rise as trade-ins increase. This could create a broader ecosystem in which consumers upgrade to newer, more expensive iPhones while older models move into the secondary market rather than disappearing from the addressable market. That gives Apple another way to maintain its premium positioning without relying solely on lower prices.