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Numbers That Surprised MeEpisode 22
Business Breakdown · Smartphones

Why are cheap phones disappearing from Indian shops?

Shipments of phones under ₹20,000 fell 47% from July to September 2026, and India's whole phone market fell to a 10-year low. Expensive phones are doing fine, and this Diwali people are expected to buy fewer phones but spend more money.

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Numbers That Surprised Me · 24 Oct 2026 · 4 min read
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−47%
The fall in shipments of phones under ₹20,000 in India, July to September 2026, compared with a year earlier.
Counterpoint Research, 23 Oct 2026 1
In 30 seconds
  • Shipments of phones under ₹20,000 fell 47% from July to September 2026, compared with a year earlier 1.
  • India's whole smartphone market fell 20%, its lowest level in ten years 1.
  • The main reason is memory chips. The AI boom has pushed up demand for them, so phones cost more to make 1,4.
  • Expensive phones are holding up. Early iPhone 18 Pro sales are about 20% higher than the iPhone 17 Pro's 2.
  • This Diwali, Counterpoint expects about 12% fewer phones but 5% more money spent. That is a forecast, not a result 3.
What this number really means
53 in 100
for every 100 phones under ₹20,000 shipped last year, about 53 this year
our maths: 100 − 47
80 in 100
for every 100 phones of any price shipped last year, about 80 this year
our maths: 100 − 20
10 years
the market is at its lowest level in a decade
Counterpoint 1

Cheap phones took the biggest hit

Counterpoint Research, a company that tracks phone sales, published its numbers for July to September on 23 October. The whole market was down 20% on a year earlier. But the fall was not even. Phones under ₹20,000, the price band most Indians buy in, fell 47% 1.

Phones shipped, for every 100 a year earlierJuly–September 2026 vs July–September 2025
≈ 80
Whole market
≈ 53
Under ₹20,000

Source: Counterpoint 1; the 80 and 53 are our maths from −20% and −47%

Part of the fall is phones moving up a price band rather than vanishing. Counterpoint says rising prices pushed models into higher price bands 1. A phone that cost ₹18,000 last year may now cost more than ₹20,000, so it is no longer counted as a cheap phone.

Why phones cost more: memory chips

Every phone needs memory chips, the parts that hold the phone's apps and photos. Companies building AI systems are buying huge numbers of these chips, so the price has jumped. Counterpoint calls it a "memory-led cost squeeze": phones cost more to make, and buyers were already spending carefully 1,4.

New to money words? Start here

Learn something: Volume vs value

Volume vs valueBeginner

Volume counts how many things are sold. Value counts how much money is paid for them.

In this story

This Diwali, phone volume is expected to fall about 12% while value rises about 5% 3. Fewer phones, but costlier ones.

Why it matters: A market can shrink and grow at the same time, depending on which one you measure.

Common mistake: Reading "sales up" without checking whether it means more phones or more money.

Try it: A shop sold 100 phones at ₹10,000 last year and 90 phones at ₹12,000 this year. Is volume up or down? Value?

Volume is down 10% (100 → 90). Value is up 8% (₹10 lakh → ₹10.8 lakh).

What the numbers tell us

  1. Who it hits
    The budget buyer is hit hardest

    Phones under ₹20,000 fell more than twice as fast as the whole market (47% vs 20%). Those are the phones first-time and budget buyers pick.

  2. The catch
    Expensive phones are fine

    Early iPhone 18 Pro sales are about 20% above last year's model 2. People who can pay more are still buying.

  3. Trend
    Fewer phones, more money

    Counterpoint's Diwali forecast is about 12% fewer phones but 5% more money spent 3. The market is shifting from selling many phones to selling pricier ones.

  4. What to watch
    What to watch

    The festive season runs to about 8 November. The real Diwali numbers will show whether the forecast holds.

Why it matters

  • For people buying a phone this Diwali: the cheap model you had in mind may now cost more. Waiting for prices to fall may not work while chip prices stay high.
  • For shopkeepers: fewer customers are buying, but each sale is bigger. Easy-payment offers and exchange deals matter more.
  • For anyone reading business news: "sales fall" and "sales rise" can both be true. Check whether the story counts phones or rupees.
Send it.
Know someone waiting for phone prices to fall before Diwali?

Send them this: cheap phones under ₹20,000 fell 47% from July to September, because memory chips cost more. Prices may not come down soon.

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Words in this story

shipments
Phones sent by companies to shops and online sellers. It is close to sales, but counts what reaches the shelf, not what buyers take home.
memory chips
The parts inside a phone that store apps, photos and data while it runs.
forecast
An expert's estimate of what will happen, made before the real numbers are known.
quarter
Three months. July–September is the third quarter of the calendar year.

Sources

  1. Counterpoint Research, India Smartphone Market Slumps 20% YoY in Q3, Sub-INR 20,000 Shipments Nearly Halve, 23 Oct 2026
  2. Kashmir Reader, India smartphone shipments fall 20% in Q3 2026, Samsung leads market: Counterpoint, 24 Oct 2026
  3. VARINDIA, India's Smartphone Market Shifts to Value, Oct 2026
  4. Business Today, Smartphone Sales Crash 20% In India As Prices Soar, 19 Oct 2026
  5. Business Standard (Omdia data), India's smartphone shipments plunge 26% in Q3, worst showing since 2016, 20 Oct 2026

How we did this. Every number links to its source. Where sources disagree, we leave the number out and say so. When we work out a number ourselves, we say "our maths".

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