India’s smartphone market shipments are expected to decline more than 10% year-on-year in the April-June quarter, according to IDC’s preliminary estimates, landing between 32 and 34 million units. This marks the sharpest quarterly drop since the Covid-19 pandemic, driven by soaring memory costs that have pushed handset prices to record levels and weakened consumer appetite, as reported in a July 14, 2026 article by Sindhu Hariharan in The Hindu BusinessLine.
Sharpest Decline Since Covid
According to IDC Senior Research Manager Upasana Joshi, “Our early estimates put the market down more than 10 per cent year-on-year, landing somewhere between 32 and 34 million units, as elevated device prices continue to weigh on consumer demand.” The decline over 10% YoY in a quarter is the sharpest for the Indian smartphone market since the pandemic, analysts note.
Memory Costs Squeeze OEM Margins
Tarun Pathak, Research Director at Counterpoint Research, said memory costs have already increased nearly four-fold and are expected to exceed five times their earlier levels, raising smartphone production costs and squeezing OEM margins. “As a result, smartphone prices have already increased by around 15 per cent on average and could rise 20-25 per cent by the festive season,” he added. While cashback offers and EMI schemes will continue, they are unlikely to fully offset the price increases, and consumers will pay substantially more than a year ago.
Faisal Kawoosa, Chief Analyst and Founder of Techarc, noted that several brands have deferred launches because of the slowdown. “So far, memory inflation was largely confined to smartphones priced below ₹30,000. Apple’s price increase shows that pricing pressure has now become segment-agnostic,” he said.
Entry-Level Segment Hit Hardest
As per Techarc’s tracker, the average selling price (ASP) in the entry-level segment (sub-₹10,000) has risen to almost ₹9,700 as of May 2026, compared to ₹7,600 in September 2025 before memory price inflation began. In the base segment (₹10,000–₹20,000), ASP now stands at ₹15,800 versus ₹13,900 in September last year.
| Segment | ASP Sep 2025 | ASP May 2026 | Increase |
|---|---|---|---|
| Entry-level (sub-₹10k) | ₹7,600 | ₹9,700 | ~28% |
| Base (₹10k–₹20k) | ₹13,900 | ₹15,800 | ~14% |
Kailash Lakhyani, Founder Chairman of AIMRA – All India Mobile Retailers Association, reported that price hikes in the entry-level segment are actively deterring consumers, with retailers across the country seeing a drastic drop of nearly 30% in sales volumes. He cited an example: the Xiaomi Redmi A5 (3GB+64GB) originally launched at ₹6,499, but its direct replacement model, the Redmi A7 (3GB+64GB), is now priced at ₹12,499. “For every successive launch by brands, there is no real innovation or feature upgrade, but prices are seeing a steep rise,” Lakhyani said.
Overall Market ASPs Climbing
IDC estimates that overall market average selling prices have climbed steadily over the past year. “We saw ASPs grow 11-12 per cent year-on-year in Q1 2026, and now expect an even sharper increase of 15-18 per cent in Q2, taking ASPs beyond $320,” Joshi said.
Implications for Manufacturing and Supply Chain
For manufacturing executives and procurement professionals, the combination of rising component costs and declining shipment volumes signals potential pressure on factory utilisation rates and production planning. OEMs facing margin compression may need to reassess sourcing strategies for memory and other components. The deferral of new model launches, as noted by Techarc, could further impact production schedules and capacity allocation across contract manufacturing partners in India. While the source does not directly quantify factory-level effects, the data indicates a challenging demand environment that may lead to inventory adjustments and cautious output planning in the coming quarters.
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