Brands pushed Indians to buy premium phones. Now, they’re paying a price

Brands have been nudging buyers towards the premium end, where the average smartphone now costs over ₹26,000, against ₹17,000 in 2021. The devices themselves have become sturdier and offer extended software upgrades, making phone purchases more discretionary and less urgent.

“Our business used to thrive on enthusiasts and high net-worth individuals, who would previously upgrade their smartphones every year. Over the past year, we’re seeing such buyers also refraining from making purchases because the premium phones have all become incremental, and buyers get little to no worth out of buying a new phone worth over ₹1 lakh every year,” said Manish Khatri, partner at Mumbai-based electronics retailer Mahesh Telecom.

India’s smartphone market was the world’s fastest-growing until 2021, and has become the second-largest in the last 10 years. However, a doubling of memory chip costs over the past year has forced manufacturers to raise prices by nearly 40% across their portfolio, leaving prospective buyers with fewer choices. Queries sent to India's top five smartphone brands Vivo, Samsung, Oppo, Realme and Apple remained unanswered.

In a world where prices are rising and economic headwinds are real, customers are naturally making more considered choices, said Zeba Khan, director - consumer electronics at Amazon India, the country's single-largest online smartphone retailer. "Premium smartphones priced above ₹60,000 have grown close to 20% year-on-year on Amazon.in, and we are seeing new customers foraying into the premium segment for the first time. Top AI smartphone models have seen 2x growth in sales, and a big part of that is because customers are arriving at their decisions better informed than ever before. This shift is not limited to metros. Two-thirds of our searches now come from Tier 2 and Tier 3 centres, and affordability levers like no-cost EMI, exchange offers, and bank deals have meaningfully improved accessibility,” Khan said.

“By the end of 2025, the average life span of a smartphone had increased to nearly 40 months as more buyers continued to move to premium phones. This year, the impact of the war, coupled with the impact of rising phone prices due to the global memory chip crisis, will mean that fewer people will opt for upgrades. At most, they’re looking into what’s available in the used and refurbished phone market, or waiting for an additional year to see if the inflated prices cool down. Phones also support seven years of software updates as standard; so, this gives buyers fewer reasons to buy new ones,” said Tarun Pathak, director of research at independent market researcher Counterpoint India, one of the three research firms cited earlier.

Many prospective customers seeking upgrades are turning away, said Khatri of Mahesh Telecom. “Previously, there was a small percentage of buyers who would extend their smartphone’s life to five years. Today, an average phone buyer who spent ₹25,000 two years ago on a phone would not get a similar device at the same price range, because prices have increased over the past six months. These buyers are putting off purchases and getting minor repairs done, thus extending the life of phones and hurting the footfall at outlets like ours,” he said.

Industry analysts are now projecting a dip in the smartphone market by up to 8%—which would bring total sales of smartphones in India down to around 140 million units. For brands, this would be the lowest since 2021.