Smartphone market likely to see tepid demand in FY26
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A tariffs-driven slowdown in global trade could dent Indian consumption, leading to likely circumspect demand for smartphones through FY26, analysts said. A lukewarm March quarter further shortens the odds FY26 would mark a second consecutive year of uninspiring growth. Apple is expected to gain market share, however, breaking into the top five for the second straight quarter, with China's Vivo maintaining its lead at the top, said market tracker Canalys."If the US market experiences a slowdown due to tariffs, it could lead to reduced purchases of various products including those from India such as IT services, textiles, and agricultural goods," said Sanyam Chaurasia, analyst at Canalys."This could eventually have a cascading effect on the Indian economy and potentially impact consumer sentiment and demand in the long term," Chaurasia said, adding that a demand crunch will be more acute in the second half of the year, if the tariffs sustain.Analysts said they may lower their forecast for the year after initially expecting low single-digit growth in India shipments, after a tepid first quarter where shipments are likely to have declined in mid-single-digits, making it the second consecutive quarter of a fall in volumes.For the full year, experts predicted an indirect impact on shipment volumes in India stemming from a potential global economic slowdown due to decreased US demand for Indian exports.Another market analyst who did not wish to be named said if the Indian economy takes a hit, leading to job losses in India, it will have a negative impact on the sale of every product, not just smartphones. In such a scenario, consumers are expected to hold off their purchases and increase savings.The effect of tariffs notwithstanding, the smartphone market was expected to be either flat or grow marginally from last year due to a lack of growth drivers."The replacement cycle driven by 5G networks is now largely over, and there isn't any significant innovation driving new demand. There's also very little migration happening from the feature phone segment to smartphones due to its higher costs," said Navkendar Singh, associate vice president, IDC India.IDC India said it forecast not more than 2-3% growth for the current year, and even that is considered optimistic, with flat growth a possibility due to the absence of significant growth levers."The market dynamics have shifted to one where channels are pushing products to consumers. Brands which have invested heavily in strengthening the sales channels are seeing growth, while those relying on products alone are facing difficulties," Chaurasia said.Canalys said the gap among the top three has increased in the first quarter, with Vivo doing exceptionally well, crossing 7 million units in shipments, as compared to second-placed Samsung and Oppo, which shipped around 5 million units in the first quarter of 2025.The volumes in Q1 were dragged further by a sharp decline in Xiaomi's shipments to around 4 million, from 5.1 million a year ago, as it faced intense competition in both the entry-level and mid-range price segments. Xiaomi may miss out on coming in the top five in Q1, Canalys said."Lower product competitiveness and weak channel push due to less competitive margins compared to other brands has resulted in a sharp fall in Xiaomi's volumes," Canalys said.IDC said shipments in the January-February period declined 8.1% on-year, with Samsung seeing a sharp 19.5% fall in shipments. Apple though remained a bright spot for the market, with volumes growing 36% on-year. The company is set to have a record Q1 with over 3 million units shipped. It may even break into the top five brands for the first time in a quarter in India.
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