NEW DELHI, April 14 -- Fewer Indians are buying smartphones. The first three months of 2026 saw about $7.8 billion worth of phones sold-$500 million less than a year earlier-marking the slowest calendar-year start in five years. In volume terms, the market shrank nearly 12% year-on-year, with about 28 million units sold in the quarter, down from 32 million a year earlier, according to a consensus of analysts Mint spoke with. The decline in value was relatively narrower at 6%, as companies partially offset losses by raising prices in February and March. India smartphone market was flat in 2025 with a 0.6% annual growth by volume totalling 152 million units. Worryingly for the industry, this is the first time in recent years that smartphones are witnessing a simultaneous decline in both value and volumes at the start of a calendar year. So far, brands had relied on no-interest monthly instalments to sustain sales of higher-value phones-a strategy that appears to have hit a roadblock, at least for now. The slowdown coincided with sweeping geopolitical tensions that cascaded into financial markets worldwide, pushing up energy prices and dampening consumer sentiment. According to analysts at IDC India and Counterpoint, consumers are deferring purchases amid uncertainty. "High prices of necessary commodities such as cooking gas and fuel have led to a rise in the cost of transportation and basic necessities. This means that even though a smartphone today is almost an essential commodity, a new smartphone's purchase will still go down the order of importance, at least until the market stabilizes. In such a market, either brands or retailers will have to compromise on margins if they were to boost sales and keep the industry's growth afloat," said Navkendar Singh, associate vice-president at market research and consultancy firm, International Data Corp (IDC) India. On 7 April, Mint reported that each of India's top smartphone brands increased phone prices by nearly 40% in many cases. The top five brands account for nearly two-thirds of the market, and despite price hikes, the slowdown is expected to impact them due to their broad market exposure. Maintaining value growth is critical for brands navigating what is now nearly five straight years of market stress in India. Sales peaked in 2021, when remote work and online education drove device upgrades. Since then, brands have leaned heavily on no-interest instalment schemes to push premiumization. Between March 2022 and March 2026, the average selling price (ASP) of smartphones rose from Rs.15,000 to Rs.26,000-an annual increase of nearly 12%. However, that cushion is weakening. "Previously, we have seen price increases being offset by no-cost installments, making it easier for buyers to afford more expensive devices. But now, even the cost of minimum monthly payments are rising, which is making buyers consider refurbished phones at lower prices, or even repairs. The ones that will pay the price would be the brands and some of the largest retailers across the industry," added Tarun Pathak, director of research at Counterpoint India. IDC's Singh noted that the firm had projected flat annual revenue growth for 2026-but that forecast did not fully factor in war-related uncertainty and its impact on global commodity and component pricing. "For now, beyond the first quarter, a lot would depend on how the global financial markets stabilize, and if that brings parity back to the industry." Adding to the strain, memory chips-a core smartphone component-more than doubled in price in the final quarter of 2025 due to a global supply crunch. Analysts now expect prices to largely sustain at elevated levels. "Memory chip costs will come down, but it's unlikely that the entire price spike will be reversed. As sales for brands slow down, so will their orders to contract manufacturers. This looks like a possibility at this moment, even though a long-term resolution to the Iran war, which all industries and nations are hopeful of at this moment, could be a silver lining for reversing consumer sentiment and shipping disruptions," said Harshit Kapadia, vice-president at brokerage firm, Elara Capital....