Synopsis

India's smartphone market is experiencing a sharp decline in sales during the festive season. Recent data indicates a 16% year-on-year drop in unit sales, influenced by affordability challenges. Retailers are reporting similar downturns, estimating a 20% decline since the start of Navratri. While premium smartphones remain steady in sales, entry-level models are suffering significant losses.

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Kolkata: India's festive smartphone market is staring at one of its sharpest-ever downturns, with unit sales falling 16% year-on-year during ecommerce Navratri sales, according to market tracker Counterpoint Research.

Lower discounts and regular price hikes by handset makers to offset higher chip costs is squeezing affordability despite ecommerce platforms attracting record consumer traffic. Average online festive discounts on smartphones have narrowed to 10-25% from 25-40% during last year's sales, Counterpoint said. This comes amid a 35-40% surge in smartphone prices on average, triggered by a two- to three-fold surge in memory chip prices, rupee depreciation and higher freight costs.

Online Navratri festive sales, the largest in terms of discount and business, began last week and will continue till this weekend. This period contributes 60-65% of the total festive business in ecommerce.

ET Bureau

Brick-and-mortar retailers are reporting a similar slump, with the All India Mobile Retailers Association (AIMRA) estimating a 20% drop in sales since the onset of Navratri. While retailers expect sales to pick up closer to Dussehra and Diwali, AIMRA estimates overall festive retail sales could still decline by over 15% from last year.

"India's smartphone festive season has started on a weak note, with volumes declining 16%, making it one of the steepest declines in recent years," said Shubham Singh, research analyst at Counterpoint. "Consumer interest is still there, but affordability is becoming the bigger challenge."

Smartphones are among the biggest contributors to festive sales, with the period accounting for 30-35% of annual handset sales. The category is also a major revenue driver for online retailers such as Amazon, Flipkart and JioMart, contributing up to 35% of their festive-season business. Quick-commerce platforms, too, have been betting on smartphones to boost sales.

AIMRA founder chairman Kailash Lakhyani said manufacturers had acknowledged that online sales this festive season had turned out to be a "flop show". Inflationary pressures led to an alarming 40-50% decline in retail footfalls in September, he said.

"Consequently, platforms and brands have extended sale timelines simply to liquidate piling inventory," he said.

"Today, 70-80% of retail sales are driven by consumer financing. Budget-conscious consumers are increasingly turning to refurbished units, second-hand devices or simply repairing their existing phones, impacting retail volumes."

Amid the overall downturn, the premium smartphone segment priced above ₹45,000 has remained relatively resilient, Counterpoint said. However, higher upfront costs following price hikes are limiting conversions despite continued demand for premium models.

Smartphone unit sales in the first eight months of 2026 fell 10% year-on-year, while sales by value rose 4%, reflecting higher average selling prices. Premium devices have been the only segment to register growth, even as entry-level and mid-range price bands have seen steep declines.

Singh said demand could improve as the festive season progresses, but smartphone volumes were still likely to decline by double digits. Higher average selling prices (ASPs), however, should support low-single-digit growth in sales by value.

According to AIMRA, average selling prices across major brands such as Apple, Samsung, Vivo, Oppo and Xiaomi are now around ₹35,000-37,000, allowing retailers to report marginal value growth despite falling volumes. The association represents more than 150,000 retail stores.

The industry is bracing for another round of price hikes after Diwali, which could further weigh on smartphone sales for the remainder of the quarter.

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