India’s offline smartphone market witnessed a disappointing Diwali season in 2026, with mobile phone sales volumes declining by 18-20% compared with last year. Despite strong customer footfall during the festive period, rising smartphone prices, weaker purchasing power and increasing component costs prevented retailers from achieving expected sales growth.
According to the All India Mobile Retailers Association (AIMRA), the overall value of smartphone sales remained broadly unchanged compared with Diwali 2025. However, retailers sold fewer devices because the average selling price of smartphones increased.
Smartphone Sales Dropped 40% Before Dhanteras
AIMRA reported that offline smartphone sales volumes declined nearly 40% during the seven days preceding Dhanteras as consumers postponed purchases in anticipation of festive discounts.
Demand recovered somewhat during the four-day period between Dhanteras on November 6 and the day after Diwali on November 9. However, the improvement was insufficient to compensate for the earlier decline.
The association said the reduction in sales volumes squeezed profit margins and store profitability across traditional retail channels.
The Rs 30,000-60,000 price segment accounted for the largest share of purchases after discounts and offers. Premium smartphones also recorded healthy demand, while the affordable segment faced considerable pressure.
Why Are Indians Buying Fewer Smartphones?
One of the biggest reasons behind the slowdown is the rising cost of smartphone components, particularly memory chips.
Memory manufacturers are prioritising demand from AI data centres and infrastructure providers, where high-performance memory products offer better margins. This has reduced the availability of memory components for consumer electronics and increased procurement costs for smartphone manufacturers.
According to a recent Jefferies report cited by AIMRA, memory costs per smartphone have increased to approximately $60-65, compared with around $20 in 2025.
Smartphone companies are passing these higher costs to consumers through price increases. Counterpoint Research estimates that retail prices of existing smartphone models have increased by as much as 21% in India on average.
The impact has been particularly severe in the budget segment, where manufacturers have limited room to absorb higher costs.
Realme Loses More Than 50% in Sales Volume
AIMRA reported significant differences in brand performance during the festive season.
Realme recorded a sales volume decline of more than 50% across regions. The association attributed the drop to relatively uncompetitive pricing, a lack of new festive launches and less attractive consumer offers.
Apple and Google Pixel witnessed strong demand, while Xiaomi benefited from competitive pricing. Vivo, OPPO and Samsung maintained healthy sales values but experienced weaker unit volumes.
The sub-Rs 20,000 segment also struggled because of a shortage of fresh, competitive 5G smartphone models. Some buyers shifted towards brands such as Lava, HMD, Ai+, Tecno and itel, while others considered refurbished devices.
Retailers Face More Pressure as Loan Approvals Decline
Consumer financing emerged as another challenge. AIMRA said only 60-70% of logged loan applications received approval during the festive period.
Tighter lending standards and CIBIL-related rejections prevented some prospective buyers from completing purchases.
The association also expects further smartphone price increases as component costs continue rising. Xiaomi has indicated increases of up to Rs 4,000 across product categories, while other manufacturers are preparing hikes of up to 15%.
AIMRA warned that sales volumes at mainline physical retail stores could decline by as much as 50% over the next three months.
Summary
India’s offline smartphone sales volumes declined 18-20% during Diwali 2026, despite overall sales value remaining broadly flat. Rising memory chip costs, higher retail prices and tighter consumer financing affected demand. Realme recorded a decline exceeding 50%, while Apple, Google Pixel and Xiaomi performed relatively well. Retailers are now preparing for further price increases and weaker demand.