NEW DELHI – India’s entry-level smartphone market is undergoing a significant transformation, as rising component costs render sub-$100 (approximately Rs 9,000) devices increasingly unviable for manufacturers. This shift has inadvertently provided an unexpected lifeline to older 4G technology, as brands strategically reintroduce or extend 4G models to cater to budget-conscious consumers.
According to IDC, shipments of smartphones priced below $100 plummeted by a staggering 74.3% year-on-year during the April-June quarter. This drastic decline saw the segment’s share of India’s smartphone market shrink to a mere 4.5% from 15.6% a year earlier, highlighting a sharp erosion of the traditional entry-level market.
The downturn has also hit Chinese smartphone brands particularly hard
Overall smartphone shipments witnessed an 11.1% decline, totaling 33.2 million units. However, this contraction was accompanied by a significant surge in Average Selling Prices (ASP), which climbed 14.4% to a record $315 (approximately Rs 28,400). This increase is attributed to higher memory and component costs filtering through product line-ups, coupled with vendors reducing discounts to protect their margins. The sharp contraction of entry-level shipments and the growing sales of premium devices have further pushed the market’s overall price mix upwards.
This affordability squeeze is compelling buyers to consider higher price segments. While the sub-$100 segment collapsed, the $100-200 (approximately Rs 9,000-18,000) category maintained stability, accounting for 46.8% of shipments. More notably, the $400-600 (approximately Rs 36,000-54,000) segment experienced substantial growth, surging by 60.3% year-on-year, with its market share nearly doubling to 8.6% from 4.8%.
Aditya Rampal, Senior Research Analyst, Devices Research, IDC Asia Pacific, commented on the trend, stating, “Q2 2026 saw average selling prices climb 14.4% year over year to a record $315, with memory driven cost pressure showing up across the product lineup.”
The prevailing cost pressures are also reshaping the dynamics between 4G and 5G technologies. As entry-level 5G smartphones have become more expensive, several brands have strategically reintroduced or extended 4G models to retain buyers in the lower price brackets. This tactical move boosted 4G’s share of smartphone shipments to 11.1% during the quarter.
However, IDC views this as a temporary, supply-led stopgap rather than a fundamental reversal of India’s migration towards 5G. The expectation is that once existing 4G inventory is depleted, consumers at the lower end of the market may have limited alternatives but to transition to more expensive 5G devices.
The challenging market conditions have particularly impacted Chinese smartphone brands. Market leader Vivo experienced a 13.9% drop in shipments, while Xiaomi declined by 10%, Oppo by 8.5%, and Realme by 14.2%. Poco saw a 12.3% decrease, and iQoo’s shipments plunged by a significant 61%.
The pressure on brands is anticipated to intensify in the second half of the year as they exhaust their inventory of lower-cost components and approach the festive season with reduced flexibility for discounts. Upasana Joshi, Senior Research Manager, Devices Research, IDC Asia/Pacific, observed, “Demand hasn’t gone away, people are simply waiting longer to buy and those planning an upgrade may want to move sooner rather than later, before prices go up further.”
IDC projects that smartphone shipments will decline by more than 15% in the second half of 2026, leading to full-year volumes of approximately 128-130 million units, underscoring the ongoing challenges and shifts within the Indian smartphone market.
