India’s smartphone market ended 2025 with shipment volumes little changed for a fourth straight year, even as weak demand and supply-side pressures cloud the industry’s outlook for 2026, estimates from IDC and Counterpoint Research available with Moneycontrol show.
Smartphone shipments in 2025 are estimated at 151–153 million units, ranging from stalled growth to a decline of about 1 percent from a year earlier, according to the researchers' estimates.
“It’s the fourth successive year when the market is stuck at almost the same spot at 152 million. There are many reasons for it but people holding on to their smartphones for a longer time period, lack of featurephone upgrades and growth of secondary or refurbished market have hurt the growth of new smartphones,” Tarun Pathak, research director at Counterpoint, told Moneycontrol.
Even as the domestic smartphone market stagnates, manufacturing for exports has surged.
Exports are estimated to have jumped to a record $30 billion in calendar 2025, a 47 percent jump from over $20.45 billion in 2024, driven largely by the government’s production-linked incentive (PLI) scheme, as per official data.
The gains have been overwhelmingly led by Apple Inc, whose iPhone shipments — valued at over $22 billion during the year — made up roughly three-quarters of the shipments, highlighting how export-led manufacturing growth is offsetting weakness in the local market.
Q4 slump underscores structural slowdown
The weakness was more pronounced in the December quarter. Shipments fell 8–10 percent year-on-year, with volumes declining to 32–34 million units, down from around 36 million units in the year-ago period, as per Counterpoint data.
While some of the drop reflects a typical post-festive correction, analysts said the slowdown is increasingly structural rather than seasonal.
IDC, too, was cautious in its assessment but said the downturn was less severe than anticipated.
“The Indian smartphone market is projected to see a mid-single digit decline in Q4 2025. However, the dip was less severe than initially expected, as brands pushed shipments to hedge against upcoming price hikes,” Upasana Joshi, senior research manager at IDC India, told Moneycontrol.
Stronger-than-expected performance in the first half of the year and a relatively resilient third quarter helped the market avoid a sharper full-year contraction, she said.
The December quarter volumes are estimated at 32–34 million units, compared with 36 million units in Q4 2024, she added.
A tough 2026 ahead
While 2025 ended flat, 2026 will be more challenging. Counterpoint expects India’s smartphone market to decline by around 2 percent during the year, while IDC pegs shipments even lower at 145–147 million units, as the industry confronts a major supply-side shock.
Both research firms flagged a sharp and sustained rise in memory chip prices as the most significant headwind.
“The rally in memory prices shows no signs of abating, and this will impact most OEMs, especially those heavily exposed to the sub-Rs 15,000 segment,” Pathak said.
To manage cost pressures, brands are increasingly turning to shrinkflation, selective price hikes, reduced cashback offers, or absorbing higher component costs in new launches.
The pace of recovery will depend largely on how long component constraints persist, IDC said.
“The smartphone market's momentum in 2025 is being overshadowed by an unprecedented supply chain shock in the memory sector. This shortage is set to drive a market decline in 2026; consequently, the industry's recovery timeline will be dictated by the longevity of these component constraints, with early expectations pointing to some easing only after the first half of 2026,” Joshi said.
Executives at leading smartphone brands also expect demand in India to come under pressure as rising component costs force price hikes.
“Demand may see some moderation in lower-tier price segments, but probably not so much in the mid-to-premium segments. The impact will be there on the market,” said Xiaomi India chief operating officer Sudhin Mathur, told Moneycontrol.
He added that widespread financing could soften the immediate blow. “Over 60 percent of smartphone purchases are financed, which could cushion the immediate impact of price hikes on consumer buying behaviour,” Mathur said.
Even as unit volumes remain stagnant, industry revenues are still growing at around 7–8 percent annually, driven by premiumisation, he said. “Our strategy is also to move from volume share to value share,” Mathur said.
Premiumisation supports value growth
Despite stagnating volumes, premiumisation continues to support market value. Average selling prices (ASPs) rose 9–10 percent in 2025, driving overall market value growth of nearly 10 percent year-on-year.
ASPs are expected to rise another 5 percent in 2026, enabling mid-single-digit value growth even as unit shipments decline.
“Even as shipment volumes are projected to contract in 2026, market value is expected to remain on an upward trajectory, growing by mid-single digits as continued ASP hikes offset the decline in units,” Joshi said.
Chinese brands retain a scale advantage
Chinese brands are expected to maintain their dominance, accounting for about 73 percent market share in 2025, a tad lower than 74 percent in the previous year. Scale is emerging as a key advantage, particularly in securing components and negotiating pricing amid supply constraints.
With the market contracting, scale would become an even more critical differentiator, analysts said.
Joshi said larger manufacturers are better positioned to leverage purchasing power to manage costs and ensure supply continuity.
“Despite these advantages, the broader market outlook points toward rising ASPs as manufacturers across the board succumb to intensifying cost pressures,” she said.
Looking ahead, competition is expected to shift beyond hardware.
“In 2026, differentiation will increasingly move from specs to software,” Pathak said, citing operating system experience, AI-led features, and computational photography as key battlegrounds as brands attempt to stimulate upgrades in a shrinking market.
For now, India’s smartphone industry appears stuck in a low-growth cycle, marked by higher prices and slower replacements, with volume recovery still some distance away.
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