Mobile phone retailers expect 10% price hike post Diwali even as sales drop

Mobile phone retailers expect 10% price hike post Diwali even as sales drop | Photo Credit: Reuters Mainstream mobile phone retailers are experiencing a footfall and sales contraction of 25% to 35% in value-oriented categories. Furthermore, major Android handset makers are expecting a 10% price hike shortly after Diwali.All India Mobile Retail Association (AIMRA) projects a staggering 50% volume drop after mid-Novmber that could persist over an extended period. In response to flagging demand and severe component constraints, top smartphone brands have already cut production schedules by 30%, the retail body said.The festive season, beginning with Navratri and concluding after Diwali, is a crucial time for Indian mobile retailers. This period sees stores brimming with customers.Retailers are facing a subdued festive market characterised by declining footfall, plummeting sales of mass-market devices and rising costs due to a global memory chip shortage.The sub-₹20,000 smartphone segment has been the worst hit — a category that traditionally brought in volume sales. But retailers report that this segment is crippled as leading brands have not put out any lineup of viable 5G handsets.Historic price hikes of entry-level models, depreciating rupee and drop in purchasing power of rural consumers have paralysed the sub-₹20,000 smartphone segment.Major original equipment manufacturers (OEMs) have signalled that future entry-level 5G pricing will start exclusively from ₹25,000 upwards, shutting out budget-conscious consumers.With device prices climbing relentlessly, financing has become the primary driver of retail sales as 80% of smartphone purchases are supported by EMI financing. Retailers have requested smartphone brands and NBFC partners to introduce structured long-tenure, zero-down-payment schemes to sustain demand and drive volume conversions for high-ticket devices priced above ₹75,000.“Underpinning these consumer price hikes is an aggressive global memory chip supply tightening engineered by chip manufacturers. AIMRA has strongly urged the World Trade Organisation (WTO) and Ministers of Commerce and Industry across key global economies to immediately establish a multilateral regulatory watchdog to rein in artificial price manipulation. Without urgent intervention, skyrocketing device costs threaten to permanently break the mobile replacement cycle, forcing consumers to hold onto their phones for extended multi-year periods,” said Kailash Lakhyani, founding chairman and president of AIMRA. Published - November 05, 2026 01:05 pm IST