Mobile phone retailers are reporting a 25% to 35% contraction in footfall and sales in value-oriented categories, even as major Android handset makers are expected to raise prices by 10% shortly after Diwali.
The All India Mobile Retail Association (AIMRA) has projected that handset volumes could fall 50% after mid-November and remain depressed for an extended period. It said leading smartphone brands had already reduced production schedules by 30% in response to weak demand and severe component constraints.
The sub-₹20,000 segment, traditionally a key source of volume sales, has been hit hardest, with retailers saying leading brands have not introduced viable 5G handsets in the category. Earlier price increases in entry-level models, a depreciating rupee and weaker rural purchasing power have further hurt demand, the association said.
Major original equipment manufacturers have indicated that future entry-level 5G devices will be priced from ₹25,000 upwards, putting them beyond the reach of many budget-conscious buyers.
As device prices rise, financing now supports 80% of smartphone purchases, the retailers said. They have sought longer-tenure, zero-down-payment financing schemes from handset brands and non-banking financial company partners, particularly for devices priced above ₹75,000.
Kailash Lakhyani, founding chairman and president of AIMRA, attributed the expected consumer price increases to tightening global memory-chip supplies, which he alleged were being driven by chip manufacturers. AIMRA has urged the World Trade Organisation and commerce and industry ministers in key economies to create a multilateral watchdog against what it called artificial price manipulation. The report did not identify the brands, models or exact timing of the anticipated price increases.
