Highlights
- AIMRA reports offline sales of smartphones declined by 18% to 20%.
- With memory chip prices going up, smartphone prices went up, which made sub-Rs 15,000 customers go for second-hand handsets.
- Rs 30,000-Rs 60,000 price segment of smartphones saw the highest festive demand.
India’s offline smartphone market saw 18-20% decline year-on-year during the 2026 Diwali festival season. A new report by the All India Mobile Retailers Association (AIMRA) notes that the footfall was steady across offline stores during the four-day window from Dhanteras to the day after Diwali, but many buyers left without buying. The report further reveals that sales volumes had also plunged by almost 40% in the week before the festival as buyers held back for deeper discounts.
The sharp decline comes as rising component and memory costs have pushed smartphone prices higher across the board, making upgrades less affordable for everyday buyers. Apple and Motorola brands saw good demand, especially in the Rs 30,000-Rs 60,000 range and for older iPhone models sold at pre-hike rates. However, budget buyers under Rs 15,000 mostly stayed away from making fresh purchases or shifted to refurbished phones. At the same time, brands like Samsung saw their prices differ hugely between the online and offline formats, while Realme’s offline sales went down by more than 50%.
Diwali Smartphone Sales Volumes Decline 20%
Offline stores saw a drop of 18% to 20% in smartphone unit sales, as per Diwali Retail Performance report by AIMRA. In the week right before Dhanteras, sales volumes fell by nearly 40%, before showing a modest recovery during the main four-day festive period. The 2026 season, however, saw a broader market contraction compared to last year’s festive surge.
This is in line with data from Counterpoint Research, which showed shipments in Q3 2026 fell to a decade low, down 20% year-on-year. Despite unit volumes falling by as much as 20% overall sales value, the total money made by retailers remained flat. The phones that did sell were at higher price points, so retailers took in about the same total revenue as last year.
Why Smartphone Sales Fell This Diwali
Phone makers raised prices on several models due to higher component costs. Big retail chains that had built up older inventory at pre-hike prices managed to offer discounts of 12% to 15%, but smaller retailers struggled to match those deals. The increasing costs of everyday living and higher prices of mobile phones were squeezing wallets, and affordable 5G options under Rs 20,000 were in limited supply. To manage the upfront cost, buyers had to opt for EMIs, with almost 60% of festive smartphone purchases financed this way.
Buyers waited until the last minute for festive offers, which led to a sharp 40% sales slump in the pre-Dhanteras week. Also, big price differences between online shopping platforms and offline stores made many customers browse in shops and buy online. A large number of budget-conscious customers visited stores looking for phones under Rs 15,000 but returned empty-handed. Many of those consumers opted to keep their old phones or buy refurbished ones rather than buy brand-new devices at a premium.
Smartphone Price Hikes Impact Consumer Demand
From entry- to mid-range phones, rising manufacturing and component prices pushed brands to increase the smartphone prices. AIMRA noted that phone prices may be pushed up further by 15 per cent in the coming months due to continued pressure on component costs. Brands that depend heavily on budget and lower mid-range buyers suffered the most. Realme’s offline sales volumes dropped over 50% in several regions because of higher prices than competitors, fewer new launches and weak festive offers.
Lack of fresh 5G models under Rs 20,000 also pressured Vivo and Oppo. The small, independent mobile retailers serving the under-Rs 15,000 segment took the biggest hit. New upgrades were effectively priced entry-level buyers out, leaving local shopkeepers with slow-moving stock.
Did Premium Smartphones Perform Better This Diwali?
The maximum number of buyers were attracted to Rs 30,000-60,000 and premium segment, while sales of entry-level devices were impacted post bank discounts and festive offers. The Average Selling Price (ASP) of smartphones has increased substantially, fueled by the sheer volume of sales in the upper-mid and premium phones. The total number of phones sold fell but the average sale was worth more.
Retailers reported that demand was strong for the iPhone 15, 16 and 17 models when pre-hike stock was available, as well as for the iPhone 18 Pro and Pro Max. Motorola and Xiaomi, driven by Redmi Note 17 series, also registered healthy demand, while Google Pixel grew as a fast-growing favourite in the premium space.
What the Diwali Smartphone Sales Decline Means for India’s Market
AIMRA has cautioned that as the festive footfall cools off, offline sales volumes could be down by as much as 50% over the next three months. Retailers are also asking phone brands, particularly Samsung, which had big price differences between online and offline for its Galaxy S25 and Z Fold 8 models, to keep pricing fair and consistent across channels.
Low-income buyers are extending the life of their existing devices, while those willing to spend Rs 30,000 and above are actively upgrading using EMIs and bank offers. Smartphone brands and retailers will likely need to offer deeper bank discounts, better trade-in values and more competitive sub-Rs 20,000 5G launches to attract budget buyers back to stores for the coming year-end and New Year sales.
