India’s smartphone market just posted its weakest June quarter in six years — and yet some of the newest names in the category are growing fastest. That contradiction says a lot about where marketing power is shifting in one of the country’s most fiercely contested categories.
According to a report in ETBrandEquity.com, India’s smartphone shipments declined 10% year-on-year in Q2 2026, the steepest June-quarter fall in six years. The cause sits far outside retail: a global memory shortage, driven by AI infrastructure demand pulling DRAM and NAND supply toward data centres, has pushed up component costs. OEMs raised prices by roughly 15% by the end of Q2, and the sub-Rs 15,000 segment — long the volume engine of the market — dropped 45% year-on-year.
The winners in a shrinking market
Despite the contraction, challengers found room. Nothing, including its CMF line, grew shipments 105% year-on-year in Q2, helped by the Phone (4a) series and its RCB sponsorship through the IPL. Motorola grew 53% in Q3 2025 on the back of its G and Edge series plus a wider retail footprint. Realme, meanwhile, saw its sub-Rs 20,000 range become its weakest price band — a reminder that a pricing-led position is the easiest one for rivals to copy.
For two decades, the formula in India was straightforward: outspend, out-distribute, outlast. Samsung, Vivo, Oppo and Xiaomi built dealer networks, service centres and, crucially, familiarity. Rising costs have made the cheap-and-loud version of that formula harder to sustain.
Why price stops working
“Price can get a consumer to consider a product, but it rarely creates sustained preference,” Himanshu Tandon, vice president, business, at Nothing CMF, told ETBrandEquity.com. His stated order of priorities — product first, then brand, software and distribution — is instructive for any marketer in a commoditised category.
iQOO CEO Nipun Marya made a similar point, noting that consumers now weigh performance, design, camera, AI, after-sales support and overall value alongside price. In other words, the question has moved from “can I afford it?” to “is it worth it?”
AI is no longer a differentiator
The spec race has migrated to AI, and that creates its own trap. “Consumers will not buy a smartphone simply because it has ‘AI’ written on the box,” Tandon said. HMD is trying a narrower route with the Vibe2 5G, which integrates Sarvam AI with a focus on Indian languages and accessibility — utility over badge.
HMD India and APAC VP and CEO Ravi Kunwar argued that fundamentals — performance, camera, battery, durability, value — always matter, and AI becomes meaningful only when it strengthens them.
The media mix has tipped decisively digital
The buying journey now runs from an Instagram discovery to a YouTube review to a marketplace or store visit — and budgets have followed. Per the report:
- CMF puts roughly 65-70% of marketing investment into digital, up over the past two to three years.
- A typical smartphone launch splits about 60-65% digital, 15-20% retail, 10-15% OOH and 5-10% TV.
- iQOO allocates close to 100% of its budget to digital, with social the biggest slice, followed by creators.
- HMD keeps no fixed split, leaning on TV and OOH for scale and retail nearer the purchase point.
Fewer campaigns, stronger ideas
More competition has produced more campaigns — not more memorability. Marya’s view is that a clear proposition and strong product-market fit beat a stream of fragmented visibility pushes. Metrics are shifting accordingly: reach and impressions still count, but engagement, consideration and business outcomes matter more as journeys stretch across creators, reviews, apps, marketplaces and stores.
What marketers can take from this
The challenger advantage here is speed, not spend — spotting a shifting need, building for it, and talking about it in contemporary language. But as Tandon noted, established brands still hold trust, distribution, service infrastructure and familiarity, which take years to build. A good product can win the first sale; service and consistency win the second.
Kunwar framed the heritage problem neatly: a legacy name gives you a head start, but relevance keeps you in the race, and every generation expects a brand to earn it again.
The practical lesson for marketers across categories: in a market where costs rise and specs converge, the durable asset is a single, clearly owned attribute — design for Nothing, gaming and performance for iQOO, clean Android for Motorola — supported by proof at the point of service.
Source: ETBrandEquity.com
