New Delhi: India’s smartphone market could face a significant slowdown if device prices continue to climb, with as much as 25–30% of annual sales potentially being deferred as consumers postpone upgrades amid affordability concerns, according to a joint study by Trakin Tech and technology research firm Techarc.
The study, which surveyed 5,958 smartphone users across India covering metro, tier-2, tier-3 and rural markets, found that more than half of intended smartphone demand may not convert into purchases during the upcoming festive season if prices rise beyond consumer expectations.
According to the report, 54% of prospective buyers indicated they would either postpone purchases or shift to refurbished devices should smartphone prices continue their upward trajectory. However, researchers noted that this represents delayed demand rather than permanently lost demand, suggesting consumers are likely to return to the market once prices stabilise or attractive offers emerge.
The findings come at a time when smartphone manufacturers are grappling with rising component costs, particularly for NAND flash and DRAM memory. The study noted that smartphone prices have already increased by 8–12% on average between January and May 2026, based on an analysis of 79 smartphone models across 21 brands and six pricing tiers. Continued memory supply constraints and currency-related pressures are expected to keep prices elevated through the second half of 2027.
Based on projected festive-season demand erosion, the report estimates that annual smartphone shipments could decline to 115–120 million units, significantly impacting overall market volumes.
Consumers Prefer Waiting Over Paying More
When asked how they would respond to higher-than-expected smartphone prices, nearly half of respondents said they would delay purchases until prices settled. Another 22% indicated they would compromise on specifications to stay within budget, while 17% said they would proceed with their purchase regardless of price increases.
The study also found growing acceptance of alternative purchase routes. Seven percent of respondents said they would rely on EMI financing, while 6% expressed willingness to buy refurbished devices instead of new smartphones.
Millennials More Price Sensitive Than Gen Z
Contrary to conventional assumptions, younger consumers emerged as the most resilient buyer segment. Consumers aged 18–24 were the least likely to postpone purchases, while buyers in the 35–44 age bracket showed the highest propensity to defer upgrades.
The report attributes this trend to greater financial responsibilities among older consumers, while younger buyers continue to view smartphones as aspirational lifestyle products and remain more receptive to financing options.
With 57% of survey respondents belonging to the 18–24 age group and students accounting for nearly half of the sample, researchers believe youth-driven demand will play a critical role in shaping the market’s future trajectory.
Mid-Range Segment Faces Maximum Pressure
The study identifies the ₹15,000–₹30,000 and broader mid-range category as the most vulnerable segment in the event of sustained price inflation. Buyers in this segment displayed the highest levels of purchase deferral and downtrading behaviour, making it the key battleground for smartphone brands.
In contrast, ultra-premium consumers appeared far less affected by rising prices. Owners of smartphones priced above ₹1 lakh were the least likely to postpone purchases, reinforcing the relative resilience of the premium and luxury segments.
Experience Now Matters More Than Specs
The research also highlights changing consumer priorities. Camera performance, battery life and processor capabilities emerged as the top upgrade drivers, while buyers increasingly prioritise overall user experience and long-term usability over traditional specification-led marketing.
At the same time, financing and refurbished-device ecosystems are gaining mainstream acceptance. Consumers who have previously used EMI options were found to be significantly more likely to finance future purchases, signalling the growing importance of affordability-focused sales strategies.
Strategic Implications for Brands
The report argues that smartphone makers should move beyond broad-based pricing and promotional strategies and instead adopt a more segmented approach.
Recommendations include developing “lite” variants that preserve flagship experiences at lower price points, deploying targeted discounts in the mid-tier segment rather than blanket price cuts, expanding focus on tier-2 and tier-3 markets, and tailoring campaigns around distinct buyer groups such as aspirational upgraders, value-conscious waiters and finance-dependent consumers.
“The festive season will become the most important window for converting deferred demand,” the report notes, adding that brands capable of combining financing, trade-in programmes and targeted promotions will be best positioned to mitigate the impact of rising prices.
The Trakin Tech–Techarc study was conducted among 5,958 smartphone users across India in English and Hindi. The survey covered users of 11 smartphone brands across metro, urban and rural markets. Researchers noted that the sample primarily represents active, online, technology-engaged consumers who are more likely to be researching or planning smartphone purchases, rather than the entire population of Indian mobile phone users.
