India’s smartphone market is splitting in two — and the bottom is falling out. Shipments in the April-June quarter dropped 10% year-on-year, the steepest June-quarter fall in six years, according to Counterpoint Research. The damage was concentrated at the bottom: volumes of phones priced below Rs 15,000 crashed nearly 50%.
Yet the average selling price climbed to around Rs 30,000, up almost 20% from a year earlier. Indians aren’t buying fewer phones because they can’t afford them — those who are buying are spending more than ever.
“Demand in the mid-premium segments is sustaining fairly well, whereas volumes at the lower end are languishing,” says Upasana Joshi, senior research manager at IDC India and South-East Asia. The Rs 15,000-30,000 band and above remains robust as consumers chase upgrades. Samsung has raised Galaxy prices several times in eight months; its volumes haven’t flinched.
The premium shift isn’t new. In the September 2025 quarter, Apple alone shipped 5 million units — the iPhone 16 took 5% of total shipments, the iPhone 17 and iPhone Air another 16%. Total smartphone sales hit 48 million that quarter, up 4.3% year-on-year, IDC data shows. For 2025 as a whole, though, shipments were flat at 152 million units. The market isn’t growing; it’s trading up.
What’s funding the splurge? Credit, in large part. “Aspirations to upgrade to a better phone, combined with the availability of affordable credit, is driving sales at the higher end,” executives at a smartphone company said. RBI data shows ‘other’ retail loans — excluding car, home and credit card debt — grew a brisk 23-24% year-on-year every month from January to June.
Not all of that went into devices, but a fair share of high-end phones is bought on EMI, with banks and shadow lenders partnering brands right at the checkout counter. Gen Z remains the prize target — a cohort flush from the 2025-26 income tax cuts that zeroed out tax for salaried employees earning under Rs 12.75 lakh a year.
The entry level tells the opposite story: affordability is eroding fast. Memory costs for a Rs 10,000 phone have nearly quadrupled to Rs 4,500, and manufacturers have little choice but to pass some of it on. The result: phones under Rs 15,000 made up just 27% of shipments at the end of June, down from nearly 46% a year earlier, Counterpoint estimates — even with makers like Boltt absorbing a sizeable chunk of the cost increase.
“Passing on the entire increase would directly affect demand,” said founder and CEO Arnav Kishore, noting these buyers are acutely price-sensitive.
That matters because the mass market has historically driven India’s replacement and first-time-buyer demand. With fewer affordable models on shelves, consumers are simply holding on to their phones longer. Replacement cycles of 18-24 months have stretched out, experts say — and incremental upgrades in display or connectivity are no longer sealing the deal. “Buyers are beginning to question whether the extra spend is worth it,” says Faisal Kawoosa, founder and chief analyst at Techarc.