After months of sliding sales, India’s smartphone market finally posted a healthy uptick in the June quarter, but analysts warn the recovery may be tempered by rising prices.
New Launches Spark a Comeback
Shipments rose 7-8% year-on-year to an estimated 37-38 million units in Q2 2025, ending two straight quarters of decline. Industry trackers say the revival was driven by a flurry of model launches across entry-level, midrange, and premium segments.
Brands also pushed harder on above-the-line marketing campaigns and offered sweeter channel margins to retailers—moves that helped nudge volumes up.
One analyst summed it up: “It wasn’t a surge in consumer demand—it was brands pushing harder and smarter.”
Prices Keep Climbing
Average selling prices (ASP) touched a record $275 in Q2, marking a 10.8% jump from a year earlier. That’s partly because brands launched more feature-packed midrange and premium models, and partly because of currency and component cost pressures.
While higher ASPs can boost revenue per device, they risk narrowing the pool of buyers, especially in a price-sensitive market like India.
Some industry voices say this could cap full-year shipment growth even if the next two quarters hold steady.
Entry-Level Segment Bounces Back
The budget category—often the first to take a hit in a slowdown—showed surprising strength. Shipments in the entry-level segment jumped 22.9% year-on-year, pushing its share of the market up to 16% from 14% last year.
This growth suggests that, despite price hikes, there’s still a sizable demand for affordable smartphones, particularly in rural and semi-urban markets.
One Mumbai retailer said, “People might delay buying a ₹50,000 phone, but a ₹10,000 upgrade still feels doable.”
iPhone 16 Leads the Premium Pack
Apple had a standout quarter, with the iPhone 16 emerging as the most shipped model in the market. Analysts attribute its success to aggressive trade-in offers and installment plans in both offline and online channels.
Apple’s momentum also reflects India’s expanding premium segment, even as overall consumer sentiment remains cautious.
Offline Retail Gains, Online Stays Flat
Offline retail channels saw significant growth in Q2, benefiting from higher foot traffic and exclusive in-store promotions. By contrast, online sales held steady without much change from the previous year.
This offline revival is partly tied to tier-2 and tier-3 city consumers, who still prefer to physically handle devices before buying.
