Premium Push: How India's Smartphone Market is Evolving Beyond Budget Devices

• Chinese brands saw first-ever revenue decline (4.5%) in FY25

• Budget phone market share dropped from 38% to 29% in two years

• Premium segment (>₹45,000) grew from 36% to 47% market value

• Apple and Samsung benefiting with 18% and 12% growth respectively

• Component costs rising, especially memory chips

• Market restructuring likely to continue

India's smartphone landscape is undergoing a significant transformation as consumer preferences shift dramatically toward premium devices. This evolution is having a particularly pronounced impact on Chinese manufacturers who previously dominated the affordable segment, according to recent market analysis.

For the first time, the nine largest Chinese electronics companies operating in India experienced a collective revenue decline of 4.5% in FY25. This marks a stark contrast to their impressive 42% revenue growth just one year prior.

Budget Segment Losing Ground

The primary driver behind this shift appears to be waning interest in entry and mid-range smartphones. Devices priced under ₹20,000 now represent only 29% of the market value, down significantly from 38% two years ago.

While Chinese brands like Xiaomi, Oppo, OnePlus, and Realme still command between 73-75% of sales volume, their value share has decreased from 54% in 2023 to 48% in 2025. Industry experts suggest this weakness in affordable and mid-range segments may persist as the premium category continues to expand.

Contributing to this trend is the rising cost of smartphones, driven largely by increased prices for critical components, particularly memory chips.

Premium Segment Flourishes

As budget phone sales struggle, the premium category is experiencing robust growth. Smartphones priced above ₹45,000 have increased their retail value share to 47% in 2025, up from 36% in 2023.

This shift has created favorable conditions for companies like Apple and Samsung. Apple's India sales grew by 18% in FY25, reaching ₹79,378 crore, while Samsung recorded a 12% increase to ₹1.11 trillion. These premium-focused brands are gaining market value as consumers increasingly opt for higher-end models.

Among Chinese manufacturers, Vivo demonstrated stronger performance than its competitors, posting an 11% revenue increase thanks to its premium device lineup.

Despite the overall decline, Indian consumers still spent nearly ₹1.65 trillion on products from the nine leading Chinese brands in FY25, only slightly below the ₹1.72 trillion spent the previous year.

Looking Ahead

Oppo Mobiles India reported a substantial 38% drop in FY25 sales due to reduced volumes, which also impacted profits. OnePlus attributed recent fluctuations in sales and profitability to investments in systems, compliance, and infrastructure aimed at supporting long-term growth.

Most companies have expressed optimism that business volumes will improve in the current financial year. However, analysts remain cautious, suggesting that challenges may persist as increasing prices and evolving consumer preferences continue to reshape India's smartphone market.

As premium devices capture more market share, manufacturers heavily invested in the budget segment may need to reconsider their strategies to adapt to this changing landscape.