India’s smartphone market faces double-digit slump over rising RAM costs: Reports

Pune: India’s smartphone market is heading into one of its weakest years in recent memory, with research firms projecting a double-digit decline after a difficult start to 2026 marked by rising memory prices, softer demand, cautious consumer spending and slowing upgrade cycles.CyberMedia Research (CMR) said India’s smartphone shipments declined 2% year-on-year in Q1 2026, while Counterpoint Research pegged the decline at 3%, calling it the weakest quarter in six years. CMR expects the market to contract 10% to 12% for the full year, while IDC has warned the global smartphone industry could see its steepest-ever annual decline as AI-driven demand pushes up DRAM and NAND prices.“India’s smartphone market entered 2026 under clear cost pressure,” said Menka Kumari, senior analyst at CMR, pointing to rising memory costs and slower upgrade cycles. Counterpoint said brands were dealing with “mounting BOM pressures”, while IDC described the downturn as a “structural reset” rather than a short-term slowdown.The pressure is beginning to reshape the market across segments.CMR said Vivo led the Indian smartphone market in Q1 with a 21% share, followed by Samsung at 17%, OPPO at 14% and Xiaomi at 12%. Vivo also topped the 5G segment with a 23% share, driven largely by its Y-series portfolio and aggressive offline expansion.Samsung retained strength across both premium and value-focused categories, while OPPO emerged as the fastest-growing among the top five brands. CMR said OPPO shipments grew 12% year-on-year, helped by the refreshed A6 series portfolio.Apple, meanwhile, continued to strengthen its position at the premium end of the market. According to CMR, Apple reached a 9% shipment share in Q1 2026, with the iPhone 16 series contributing 53% of volumes and the newer iPhone 17 series accounting for 28%. Counterpoint separately said Apple’s India shipments grew 20% year-on-year during the quarter.The divergence between the premium and mass-market segments is becoming increasingly stark.CMR said the affordable smartphone segment declined 46% year-on-year, while the value-for-money category fell 12%. At the same time, the premium segment grew 25%, reinforcing what analysts increasingly see as a long-term shift in consumer behaviour rather than a temporary fluctuation.Counterpoint said more than 80 smartphone models saw average price increases of around 15% during Q1 because of rising bill-of-materials costs. The firm added that brands advanced nearly one-third of planned launches into Q1 to manage pricing volatility, memory shortages and inventory pressure.IDC, meanwhile, warned that the rapid rise in DRAM and NAND pricing could make entry-level smartphones increasingly difficult to sustain profitably over the coming quarters, especially for Android brands operating at thin margins.The result is a market where brands are no longer competing purely on pricing or annual specification upgrades. Instead, financing schemes, long-term ownership value and ecosystem integration are becoming increasingly important.That shift is particularly visible at Xiaomi.The company retained a 12% market share in Q1 2026, according to CMR, with the Redmi 15A helping stabilise volumes during what the firm described as a broader portfolio transition. But Xiaomi’s story this year is less about shipment rankings and more about how it is adapting to changing consumer priorities.Sandeep Sarma, associate director of marketing and PR at Xiaomi India, said consumers today are approaching smartphone purchases very differently compared to even two years ago.“The consumer’s behaviour has changed quite a bit over the past two and a half years, and even more so in the last six months,” Sarma said.According to him, buyers are increasingly prioritising reliability, durability and long-term ownership experience over spec-sheet jumps or yearly upgrades.“People want something that’s dependable, not just on day one, but something that’s dependable for years after that as well,” he said.Sarma said Xiaomi has seen a growing number of consumers returning to the brand after experimenting with rival devices over the past few years.“Something that looks great on paper need not always translate to a great long-term experience,” he said. “We see a lot of people sort of coming back to their roots.”That behavioural shift is also changing how consumers think about pricing and affordability.According to Sarma, buyers are increasingly evaluating smartphones based on monthly instalments rather than upfront prices, mirroring financing trends seen in more mature global markets.“People are looking at the monthly instalments as being the point of decision-making,” he said. “They’re not looking at what is the eventual pricing.”That, in turn, is accelerating movement into higher price bands across the industry.“People are going from a Rs 10,000 or Rs 15,000 phone directly into a Rs 1 lakh-plus smartphone,” Sarma said, adding that such jumps are “not considered abnormal anymore”.He attributed part of that shift to the growing role smartphones play in everyday life. “A smartphone right now can do so many things that people find it easy to reason out spending additional money,” he said.For Xiaomi, the trend is translating into stronger momentum in the mid-premium segment.Sarma said Xiaomi’s Rs 35,000 to Rs 50,000 category more than doubled year-on-year between February and April, driven by devices such as the Redmi Note 15 Pro Plus and Poco X8 Pro Max.“We sort of said, let’s choose around a rendezvous point and say this is where we’ll meet the consumer,” he said, describing the company’s approach to the segment. “Instead of going by historical data, we anticipated where the market was headed.”The company believes its traditional value-driven positioning is also helping it navigate the current cost pressures better than some rivals.Sarma said Xiaomi absorbed much of the recent component inflation internally instead of fully passing it on to consumers.“That value-for-experience quotient is seeming more and more lucrative for consumers as things become more volatile,” he said.At the same time, Xiaomi is also trying to broaden its identity beyond smartphones.Sarma said the company increasingly sees itself as an ecosystem player spanning smartphones, tablets, TVs and connected home devices.“We are not just a smartphone company,” he said. “We want to bring the entire human x car x home ecology here.”According to Sarma, categories such as Mini LED TVs and connected devices have shown particularly strong momentum this year, with some product categories recording growth multiples compared to previous generations.Still, the broader industry outlook remains cautious.CMR senior analyst Amit Sharma warned that brands risk leaving the Rs 5,000 to Rs 15,000 category underserved as they chase premium growth and profitability.IDC and Counterpoint both expect pressure on the lower end of the market to continue through the year as memory costs remain elevated and replacement cycles stretch further.The result is an Indian smartphone market that increasingly looks very different from the one that drove explosive growth over the past decade.The age of easy volume-led expansion is fading. In its place is a slower, more mature and increasingly premium-focused market where consumers are holding on to devices longer, brands are competing on financing and ecosystem value, and profitability matters as much as shipment share.