How costlier phones, longer use make case for smartphone protection plans

As smartphone prices rise and replacement cycles stretch to about 40 months, consumers are increasingly opting for protection plans, with adoption stronger for premium and refurbished devices

Indian consumers are holding on to their smartphones for longer as new devices become more expensive. That should, in theory, make protection against accidental damage and repair costs more relevant.

 

Subrat Pani, co-founder of OneAssist, which provides protection plans across consumer electronics, said smartphone ownership cycles have stretched from around 14 months to about 40 months over the past several years. At the same time, he said device prices have risen by 25-27 per cent over the past seven to eight months, with further increases expected.

 

The combination is creating what Pani describes as an "inflection point" for device protection. Consumers are paying more for devices and expecting them to last longer, increasing the potential cost of an accident or breakdown during the ownership period.

 

There are signs that the market is responding. OneAssist estimates that protection is currently attached to around 6-8 per cent of new smartphone sales, up from around 1-2 per cent a few years ago. Adoption is higher for premium devices, while Cashify, which operates in the refurbished smartphone market, said around one in five customers opted for an extended warranty in the last quarter.

 

The growth, however, is not uniform. Protection remains heavily dependent on where and how a device is sold, while rising prices are also changing what counts as a premium smartphone.

When is protection adoption higher

OneAssist estimates that around 6-8 per cent of new smartphone sales currently have some form of protection attached, including plans from device makers, retailers, insurers and third-party providers. But adoption varies sharply by channel.

 

In offline and assisted retail environments, attachment rates are around 18-20 per cent, while on e-commerce platforms they remain below 1 per cent, according to the company. Five years ago, offline attachment rates were closer to 10-12 per cent.

 

Pani describes protection as an "assisted sales" category because consumers want to understand what happens when a device is damaged, whether a claim will be processed and what conditions apply to the plan before paying for it.

 

"Customer wants to be sure about what will happen when the claim happens. Is it reliable? Will it get processed?" Pani said.

 

The difference between channels is significant because around half of smartphone sales are now through e-commerce, according to Pani.

Premium phones are driving adoption, but the price bands are shifting

There is a clearer relationship between device price and protection adoption. Pani said mid-range and premium smartphones have historically seen higher protection-plan adoption because the absolute cost of repairing or replacing them is higher. In some Apple stores, attachment rates reached 20-25 per cent.

 

But Pani said the distinction between price segments has begun to blur over the past six months.

 

"A phone that may earlier have been considered a decent mid-range device at around Rs 30,000 is now available at Rs 50,000," he said.

 

That has implications for the protection market. As prices rise, consumers who may previously have considered protection unnecessary are making a larger financial commitment to their phones.

OneAssist said adoption has increased in recent months and that premium devices continue to see higher adoption. The company also expects this trend to expand as device prices increase further.

 

However, Pani said the absolute device price does not tell the entire story.

 

"Every purchase of a smartphone is an update. That means you are moving from an earlier phone to a better phone, more expensive phone," he said.

 

A consumer buying a Rs 25,000 phone may have stretched their budget in much the same way that someone buying a Rs 1.5 lakh phone has stretched theirs, Pani said. For both, the phone can represent a significant financial commitment.

 

He said the company's research across different price bands showed that customers buying lower-priced smartphones could also show high attachment rates when protection was explained properly.

Financing is helping protection reach the purchase

OneAssist said more than 60 per cent of high-end smartphones are now purchased on credit and expects financing penetration to rise further as device prices increase. Protection plans can be bundled with device financing as an additional product, allowing consumers to pay for both through the same equated monthly instalment (EMI).

 

For example, Pani said a Rs 20,000 phone with a Rs 2,000 protection plan could add roughly Rs 160 a month towards protection to the EMI, depending on the financing structure.

 

The growing use of financing is also changing the geography of the market.

 

Pani said that while 60 per cent of OneAssist's own portfolio now comes from Tier-II cities and above, the growing use of financing in smaller cities is improving the penetration of protection plans in Tier-III cities and below.

 

According to Counterpoint Research's Monthly Smartphone Financing Tracker, EMIs in Tier-II markets accounted for 57.5 per cent of smartphone purchases in the mainline channel in the second quarter of calendar year 2026. Tier-III and smaller markets also crossed the halfway mark, with financing penetration rising to 55 per cent.

The point of sale still matters

The timing of the protection purchase remains another important part of the ecosystem. Consumers are most receptive to protection when they are buying the device, according to Pani. For appliances, this can take the form of an extended warranty that begins after the manufacturer's original warranty expires. For smartphones, it can include protection against accidental damage and other device-related risks.

 

"Customer's interest in the category is the highest when he is buying a phone," Pani said.

 

Post-purchase protection, however, remains a relatively underdeveloped category in India.

 

That is beginning to change as providers find ways to assess devices that have already been used. OneAssist said it has started offering protection for existing devices as well as pre-owned and refurbished phones. The company uses a device diagnostic app to assess the condition of an existing handset before deciding whether it can be covered.

 

OneAssist said its system can make an eligibility decision for a used phone within about two and a half to three minutes. The company said it has protected around 25,000-30,000 used phones over the past three quarters, although it described the category as being in its early stages.

Longer replacement cycles could create a new market

The longer smartphone replacement cycle could also push protection providers deeper into India's refurbished-device market.

 

According to a study conducted by OneAssist and Hansa Research, the smartphone replacement cycle has stretched to about 40 months. If consumers delay upgrades because new devices have become more expensive, refurbished smartphones offer a way to access higher-end devices at a lower upfront cost.

 

Pani expects this market to expand as new devices become more expensive and retailers look for ways to maintain sales volumes despite longer replacement cycles.

 

Protection can become part of that market because refurbished devices carry a different risk profile from new ones. A used device may already have experienced wear, battery degradation or previous damage, making the buyer's confidence in its condition particularly important.

 

OneAssist uses device health checks to assess such phones before offering protection. The company said it has partnered with Cashify to provide protection plans for refurbished phones sold through the latter’s stores.

 

Cashify's experience suggests that protection may have a stronger proposition at the higher-value end of the refurbished market.

 

Siddhant Dhingra, chief business officer, Cashify, said around one in five Cashify customers opted for an extended warranty in the last quarter. The attachment rate was lower for devices priced below Rs 20,000 and higher in the Rs 30,000-Rs 50,000 segment.

 

"As device prices rise, customers increasingly want added protection for their purchases," Dhingra said. He said this was particularly visible among premium refurbished smartphone buyers, who were more willing to pay an additional amount for longer coverage.

 

Cashify's data provides a clearer price-band distinction within refurbished smartphones than OneAssist sees across the broader new-device market. In the latter, rising prices are bringing more devices into a range where protection becomes financially relevant. In refurbished devices, higher-value phones are already showing stronger attachment to extended warranties.

The protection ecosystem is becoming more integrated

The protection market in India is also becoming less divided between original equipment manufacturers (OEMs), retailers, insurers and third-party providers.

 

OneAssist estimates that OEM-branded protection plans account for around 20-25 per cent of the market. But the company points out that many of these plans are powered or operated in partnership with specialised protection providers and insurers.

 

That means the distinction between first-party and third-party protection is increasingly less clear from the consumer's perspective.

 

A customer may buy a protection plan carrying the name of a device maker, but the underlying claims, repair or administration may involve another company. Similarly, a retailer or financing company can become the distribution point for a protection plan provided by a specialised player.

 

OneAssist said it operates across multi-brand retail, regional retail chains, e-commerce platforms and financing partners. It also works with device makers including Samsung, Nothing and Realme, according to Pani. The company is also working with Google, although Pani did not provide details.

Trust remains one of the biggest barriers

The protection ecosystem also carries a history that helps explain why adoption remains relatively low.

 

According to Pani, the industry saw a setback around 2017-18 when large protection providers struggled with claims, fraud and customer fulfilment. That damaged confidence in the category at a time when consumers were beginning to understand device protection.

 

This is important because protection is different from many physical products sold alongside electronics. The customer is paying for a promise that may only be tested months or years later, when the phone is damaged or stops working.

 

The purchase therefore involves an element of trust in the provider and its claims process.

 

Pani said OneAssist works with retailers and OEMs partly because these partnerships can help address that trust barrier.

 

The company has also focused on the claims experience itself. For new devices, screening is generally not required at the time of purchase. For existing and refurbished devices, diagnostics are conducted before the protection plan is issued.

 

Once a plan is active, OneAssist said the claims journey is the same. Its AI- and machine learning-based decision-making system assesses customer-submitted details and images, with the company saying 94 per cent of its claims currently receive a decision within 10 seconds, either through automated approval or by being routed for further review.

 

"The claim first gets approved and then it is picked up," Pani said, describing the company's approach to claims processing.

 

The company said approved devices are then picked up from the customer and repaired using OEM networks, parts and facilities.

 

For Cashify, assurance is also becoming part of the refurbished-device proposition. Dhingra said every refurbished device sold by the company comes with a standard six-month warranty, while an additional six months of coverage is available on select devices.

 

"For refurbished technology to become mainstream, it must offer both affordability and assurance," Dhingra said.