Decline in India’s Smartphone Market During Q2 2026
The smartphone sector in India observed a notable contraction of 10 percent year-on-year in the second quarter of 2026, as consumers postponed their device upgrades while manufacturers and retailers actively worked to reduce existing inventories, according to a report released on Monday.
Insights from the technology research entity CyberMedia Research (CMR) indicated that this downturn is symptomatic of conservative consumer expenditure, escalated costs for components and devices, extended replacement timelines, and efforts to optimize inventory across retail platforms.
The decline was widespread, impacting lower price tiers significantly. The affordable segment shrank by an astounding 88 percent, while the value-for-money category moderated with a 30 percent dip year on year.
Conversely, the premium segment, defined by devices priced above Rs 25,000, experienced a remarkable growth of 54 percent.
This surge was primarily driven by the super-premium range (priced between Rs 50,000 and Rs 1 lakh), which experienced a noteworthy increase of 72 percent.
Continued aspirational purchasing behavior and attractive financing options, including zero-cost EMIs and trade-in programs, propelled this growth.
Menka Kumari, a Senior Analyst at CyberMedia Research (CMR), remarked, “The astonishing 72 percent year-on-year growth in the Super Premium segment illustrates that financing arrangements — such as zero-cost EMIs, trade-in incentives, and consumer credit solutions — have become pivotal in facilitating premium upgrades, transcending mere AI functionalities or camera specifications.”
Kumari further noted, “In contrast, the affordable and value-for-money segments are facing sustained pressure as price-sensitive consumers opt to delay upgrades, leading to a more polarized market landscape.”
On a different note, the 2G feature phone sector displayed a modest growth of 5 percent year-on-year, while the 4G feature phone category experienced a significant decline of 43 percent year-on-year.
The firm forecasts an anticipated full-year decline of 10 to 12 percent for India’s smartphone market in the calendar year 2026.
The affordable and value-for-money segments are likely to endure ongoing pressures attributed to cautious consumer attitudes, rising component expenses, and escalating device prices.
Amit Sharma, also a Senior Analyst at CyberMedia Research (CMR), commented, “Elevating component costs and surging device prices are poised to keep the sub-Rs 15,000 segment under strain throughout the latter half of 2026, as consumers prolong their replacement cycles.”
Sharma added that the premium and super-premium segments are projected to witness over 50 percent growth during the second half of 2026, fueled by advancements in AI-integrated functionalities, enhanced camera capabilities, and premium aesthetics.
“This divergence signifies a fundamental shift in demand dynamics: affordability will remain the cornerstone of the mass market, whilst differentiation—including innovative form factors like foldables—will delineate growth at the premium spectrum,” he concluded.
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