Industry Odisha Bureau, Oct 25: Record memory chip prices are squeezing Chinese brands in India’s budget phone segment. Domestic makers such as Lava and Ai+ are gaining ground. Holding those gains will demand far more than rivals’ retreat.
Chinese smartphone makers are losing their grip on India’s market. Record memory chip prices have forced them to trim budget models. That segment long powered their sales in the country.
Omdia puts Chinese brands’ combined share at 68% for July–September 2026. It was 71% in the previous quarter and 75% a year earlier. The peak came in April–June 2020, at 80%. Counterpoint Research places the latest figure at 67%, the lowest since early 2019.
On Omdia’s numbers, that is a drop of seven percentage points in a year. Market share measures position, not the absolute number of phones sold.
Memory chips form a significant part of a smartphone’s production cost. When their prices climb, budget handsets feel the strain first. These phones compete on price and run on thin margins. Makers have little room to pass higher costs to buyers.
Vivo, Oppo and Xiaomi have responded by narrowing their entry-level portfolios. Omdia principal analyst Sanyam Chaurasia described steady cuts to phone specifications. He said the effort to control costs has run for four to five quarters. Companies have also offered fewer models in lower price bands. They are pushing mid-range and premium phones to protect profits instead. The trade-off is lower volumes but better earnings on each device.
Indian brands have stepped into the space their rivals vacated. Counterpoint Research says their share rose to 7% from 2% a year earlier. That is their highest level since October–December 2018. Lava and Ai+ made up almost 95% of it, said Counterpoint’s Tarun Pathak. Ai+, launched in July 2025, more than quadrupled shipments year-on-year. Mivi and Boltt entered the market only last quarter.
These firms have kept their line-ups intact and chased volume. Their focus is phones under ₹20,000, where buyers watch every rupee. Entry-level demand persists, but shoppers are reluctant to stretch budgets.
At the top end, Samsung and Apple have gained share through premium offerings. Their buyers tend to weigh brand and features above price. Higher-value phones also cushion these firms against costlier components.
The wider market, however, is shrinking. Shipments fell 20–26% year-on-year in July–September, according to Counterpoint Research and Omdia. The quarter’s 35.8 million units marked a decade low. Rising prices have led consumers to delay upgrades. The slowdown comes just before Diwali, usually a busy season for phone sales.
Sustaining these gains will not be easy. Omdia estimates smaller domestic brands ship roughly 300,000–500,000 units a quarter. Scaling beyond that requires strong distribution and reliable inventory, Chaurasia said. After-sales infrastructure and sound channel economics matter just as much, he added.
Pathak, Counterpoint’s research director, said growth cannot rest on rivals pulling back. He urged Indian brands to invest in research, product quality and scalable service. Deeper value-chain localisation would also help, he said. So would better user experiences that bring buyers back after a first purchase.
Chinese brands still account for about two in every three phones shipped. Indian players have won attention, but not yet lasting loyalty. Durable gains will rest on product quality, wide distribution and dependable customer service.
