India's 4G smartphone market is experiencing a significant revival as Counterpoint Research predicts 4G smartphones will increase their share from 11% in 2025 to 15% by 2027, a dramatic shift from earlier predictions of steady decline. According to Moneycontrol, this growth is driven by memory chip costs rising nearly four times since September 2025 and could rise further to five times in the coming months, making even entry-level 5G smartphones expensive to manufacture. Memory chips now account for over 45% of smartphone bill of materials in the sub-₹15,000 segment, up from less than 20% prior to 2025, forcing companies to increase retail prices of inexpensive 5G smartphones to over ₹15,000. The relationship between new and refurbished phone prices remains dynamic, with refurbished devices retaining appeal when manufacturers raise prices, as their absolute cost remains lower than new devices.
India's budget smartphone market is experiencing unprecedented challenges as smartphone shipments in the mass-market segment (below ₹15,000) fell 45% year-on-year in Q2 2026, according to Counterpoint Research. Overall smartphone shipments in India fell 10% year-on-year in the April-June quarter, marking the biggest decline for a June quarter in six years. 4G smartphone shipments increased 40% quarter-on-quarter in Q2 2026, with 4G phones accounting for 12% of smartphones sold in the quarter, compared with 7% in Q4 2025. As reported by Moneycontrol, 4G's share moved from 5.8% to 11.1% during the same period, with IDC analyst Upasana Joshi noting that several brands responded by reintroducing or extending 4G models to defend their footing in the budget segment. The average selling price of 4G phones increased 47.9% year-on-year, while 5G phone prices increased 15.2%.
Rising memory and component costs are fundamentally reshaping the smartphone market, with industry-wide average selling prices reaching a record $550 in Q1 2026, up $100 from a year earlier, according to market tracking firm International Data Corporation (IDC). As reported by Moneycontrol, smartphone memory prices had increased nearly four times since September 2025 and could rise further to five times in the coming months. The average smartphone price was around 15% higher by the end of Q2, with almost every major smartphone maker implementing multiple price increases during 2026. Memory and storage now account for more than 60% of the bill of materials for budget smartphones, forcing manufacturers to either raise prices or absorb lower margins. This cost structure pressure has pushed established brands towards more expensive devices, creating significant room at the lower end of the market, particularly below ₹20,000.
The current generation of Indian smartphone companies is approaching the market differently from previous local brands, with newer companies taking a more aggressive approach from the beginning. According to Techarc's Kawoosa, these brands can afford to lose money to build market share, and may be willing to absorb some component cost increases rather than immediately passing them on to consumers. "Since, these brands are just beginning they can afford to lose money to build market share," Kawoosa said. Even if rising component costs affect these companies too, they may be willing to absorb some of the increase rather than immediately pass it on to consumers. That could make their phones more affordable than competing products and help them acquire users. The intention to move beyond the entry-level segment is also visible among the new entrants. Boltt's first smartphones are focused on the ₹10,000-15,000 segment, but Kishore said the company does not intend to remain confined to it. "However, we do not view Boltt as being restricted to the entry-level market," Kishore said. "Over time, we see a clear opportunity to move higher up the price ladder with differentiated devices across additional segments."
Despite the current surge in 4G adoption, Counterpoint Research warns that the memory crisis may not lead to permanent 4G dominance. A separate Counterpoint Research report published in July 2026 suggests the memory shortage will accelerate 5G chip adoption in mainstream smartphones priced below $300, with 5G penetration expected to exceed 50% in 2026. The report indicates that memory manufacturers are phasing out LPDDR4, an older generation of low-power smartphone memory, as they move towards newer memory technologies such as LPDDR5 and high-bandwidth memory. Most 4G smartphone chips are configured around the older memory interface, and moving these 4G chips to LPDDR5 would require a costly redesign. This means the current rise in 4G phones in India is linked to pressure in the budget segment, while Counterpoint's longer-term research still points towards greater 5G adoption, with smartphone chip makers expected to phase out 4G chips over time and rely more on newer 5G chips based on LPDDR5 technology.
