Retail Smartphone Sales Tanked 20% In 2026 Diwali Season: AIMRA

Consumer demand and escalating prices took a toll on the offline smartphone market during the recent Diwali festive season, according to the All India Mobile Retailers Association (AIMRA). Sales volumes dropped by 18-20% over four days, from Dhanteras (November 6) to the day after Diwali (November 9). However, total sales value stayed relatively stable due to higher average selling prices.

Yet, the significant decline in volumes squeezed margins and profitability for retailers across major retail channels. Offline smartphone sales volumes in the week leading up to Dhanteras plummeted nearly 40%, as shoppers postponed purchases to wait for festive deals. Urban consumers were less keen on upgrading, while Tier 1, 2, and 3 markets saw stronger momentum, particularly in the mid-range segment.

Most purchases were made in the ₹30,000-60,000 price range after deals, while the premium segment saw steady demand. The sub-₹20,000 segment was hit hard due to a shortage of fresh, competitive 5G models. Some price-conscious buyers switched to budget brands like HMD, Lava, Ai+, Tecno, and itel, while others opted for pre-owned devices.

Financing was another hurdle, with only 60-70% of loan applications approved, causing some buyers to miss out. Apple and Google Pixel, as well as Xiaomi, benefited from competitive pricing, while Vivo, OPPO, and Samsung maintained healthy sales but saw lower unit volumes. Realme's volumes dropped by over 50% across regions, due to uncompetitive pricing, no festive launches, and unattractive schemes.

The memory chip shortage caused by the ongoing AI boom has driven up per-device memory costs to $60-65, a threefold increase from $20 in 2025, according to Jefferies. This has led to a 30% price hike for low-end smartphones. Deloitte expects this trend to persist until 2030. To cope, smartphone makers have raised prices by 21% on average in India.

The memory crisis has had a particularly detrimental effect on the budget segment, where manufacturers have limited room to absorb cost hikes without cutting margins. This is why India, a market that is sensitive to prices, has been greatly affected. The outlook suggests sales volumes at mainline brick-and-mortar stores could fall by up to 50% in the coming three months.