NEW DELHI: India's entry-level smartphone market experienced a severe downturn in the first quarter of 2026, as escalating component costs and tepid consumer demand reshaped the country's handset landscape, according to fresh data from IDC.
India's overall smartphone shipments declined 4.1% year-on-year to 31 million units in Q1 2026. However, the most significant pressure was concentrated in devices priced below Rs 10,000 ($100). Shipments in the entry-level segment plummeted 59% from a year earlier, causing the category's market share to shrink from 18% to a mere 8%.
Rising Memory Costs Squeeze Profitability
IDC attributed the collapse to rising global memory prices, which made it increasingly difficult for brands to sustain profitability in the low-cost category. This forced companies to cut product launches and reduce channel participation in the segment.
"Device makers relying on entry-level volume face shrinking margins and reduced market viability as memory costs continue to rise," the research firm stated in its report.
Forced Premiumisation Drives Market Shift
The squeeze at the bottom end of the market is also altering consumer buying behavior. IDC noted that many buyers who traditionally purchased sub-Rs 10,000 smartphones were pushed into higher price brackets because affordable options were no longer widely available. This helped the Rs 10,000–Rs 20,000 ($100–200) "mass-budget" segment grow 10% year-on-year, increasing its market share from 39% to 45%.
IDC described this trend as "forced premiumisation," driven less by upgrade aspirations and more by price inflation in the affordable category. The broader market continued shifting toward higher-value devices, despite softer overall demand. India's average smartphone selling price rose 10.4% year-on-year to a record Rs 30,000 ($302) during the quarter.
Online Channels Weaken, Offline Gains Ground
At the same time, online channels weakened considerably as brands scaled back discounts and promotional offers that had traditionally driven volumes in affordable smartphones. Online shipments fell 14% year-on-year, reducing the channel's share from 42% to 38%. In contrast, offline retail expanded to capture 62% of the market.
Industry analysts expect the trend to continue as component costs remain elevated, potentially accelerating the shift toward mid-range and premium devices in India's smartphone market.
