Rising memory chip costs and higher smartphone prices have led more Indians to buy refurbished and pre-owned devices, which accounted for 26% of smartphone sales during January-May 2026.
Counterpoint Research expects overall smartphone shipments to decline in 2026 due to higher costs, a weak rupee, and global uncertainties, while the used-phone market is projected to grow.
Higher prices of new vehicles have also boosted the pre-owned car market, with used car sales rising 9% to 6.1 million units in FY26, according to Crisil Research estimates.
THE WEST ASIA CRISIS and a series of global economic challenges have led to rising prices across global markets. As prices continue to increase, consumers are becoming more cautious and are thinking carefully before making purchases. One of the industries witnessing a sharp rise in prices is the smartphone industry. Repeated price hikes have pushed many Indian consumers to turn towards second-hand and refurbished devices, as new smartphones have become unaffordable for many buyers.
According to data from Counterpoint Research, as quoted by Business Standard, smartphone sales in the country fell by 9% during the first nine weeks of 2026. This decline has been attributed to a sharp increase in memory costs over the past four to five months. The research says that an “AI tax” on memory chips is one of the primary reasons behind the increase. Rising demand from AI data centres, coupled with a global shortage of memory components, has pushed up prices, making smartphones significantly more expensive.
Counterpoint Research also reported that refurbished and pre-owned smartphones accounted for 26% of total smartphone sales in India during January-May 2026, up from 23% during the same period in 2025. The segment is now expanding at its fastest pace. According to Counterpoint Research Director Tarun Pathak, the market for used smartphones is expected to grow, while shipments of new handsets are likely to decline.
The research firm estimates that overall smartphone shipments in India could decline by around 10% to 139 million units in 2026. Pathak attributed the slowdown to global macroeconomic pressures. Speaking to Business Standard, he said, "Macro headwinds stem from the depreciating rupee and conflict in West Asia. If this continues for another month or more, there could be further cuts in projections, as consumer purchase sentiment has started weakening from March onwards."
He added that industry sources suggest the April-June quarter will be very challenging for smartphone brands, with no immediate signs of recovery. According to him, the market may only start improving in the October-December quarter or even later, as the shortage of memory chips is expected to continue for at least another year and a half.
A similar trend is visible in the automobile industry, where demand for pre-owned cars has been rising steadily. According to Crisil Research estimates, as quoted by The Economic Times, sales of pre-owned cars increased by 9% to 6.1 million units in FY26, compared with 5.6 million units in FY25. In comparison, sales of new cars rose by 8% to 4.64 million units.
The increase in prices has pushed many consumers to look for cheaper alternatives. In the smartphone segment, analysts estimate that total sales, including both new and used devices, could reach 190 million units in India in 2026. Companies operating in the refurbished smartphone market are witnessing strong growth opportunities, especially for Apple devices.
The growing popularity of refurbished smartphones and pre-owned cars highlights how consumers are becoming more cautious with their spending amid rising prices and continuing global economic uncertainty.
[Edited by Harsh Pandey]
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