India’s smartphone shipments fell 10% year over year in the April-to-June quarter as rising memory costs pushed handset prices higher and weakened demand. Counterpoint Research said it was the country’s steepest June-quarter decline in six years.
The slowdown offers an early view of how AI infrastructure spending is affecting consumer electronics. Memory manufacturers including Samsung, SK Hynix and Micron have shifted more production toward high-bandwidth memory used in AI accelerators, reducing capacity for the RAM and storage chips found in phones and laptops.
Counterpoint’s official India market report said smartphone memory prices have increased nearly fourfold since September. Those higher component costs have raised prices across most handset segments, extended replacement cycles and weakened demand despite financing offers and promotions.
Budget Phones Take the Largest Hit
India has been affected more heavily than China because around 60% of its smartphone market consists of devices priced below ₹20,000, or about $210. The entry-level segment has less room to absorb higher component costs without passing them to consumers.
Shipments of smartphones priced below ₹15,000 fell 45% from a year earlier, according to Counterpoint. Chinese manufacturers, which are heavily exposed to entry-level and mid-range devices, saw their combined market share fall to its lowest second-quarter level since 2020.
India remains the world’s second-largest smartphone market by shipments and has more than 700 million smartphone users. Consumers are not expected to stop buying phones entirely, but replacement cycles could extend from about three and a half years to approximately four years.
Prices have risen by between 4% and 68%, depending on the device. Buyers are responding by delaying upgrades, moving toward secondhand phones or using financing to purchase more expensive models.
Premium Brands Remain Better Protected
Samsung was the only major smartphone brand to record shipment growth in India during the quarter, with volumes rising 2%. Premium devices have been more resilient because higher-income buyers are less sensitive to price increases and often use installment plans.
Apple saw shipments fall 3%, though Counterpoint attributed much of the decline to supply constraints and inventory shortages rather than weaker demand. Apple and Samsung are better positioned than budget-focused brands to absorb rising memory costs through stronger margins and higher average selling prices.
The pressure is shifting India’s smartphone market away from volume growth and toward value growth, meaning fewer phones are sold but each device generates more revenue. Retailers and manufacturers are also building inventory ahead of the festive shopping season to secure components before further price increases.
Memory shortages and elevated smartphone prices are expected to continue through at least the end of 2027. A weaker Indian rupee is adding further pressure by raising the cost of imported components, while brands increasingly pass those expenses on to consumers.
Featured image credits: Adam Cohn via Flickr
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