Festive Demand Boosts Smartphone Sales; Inventory Build-up a Concern For Q4 Aggressive festive promotions and flexible financing options drove strong shipment volumes during the period

India's festive growth of smartphones was driven by strong demand for premium smartphones, supported by new launches and previous-generation models. The festive quarter was driven by a combination of market stimulators, including attractive pricing and deep discounting, flexible payment options, trade-in and upgrade programs, and promotional offers such as cashbacks and bank deals across both online and offline channels.

The festive season was encouraging for the entire smartphone industry, with healthy year-on-year growth across the board. For the Ai+ Smartphone, which debuted on Flipkart's Big Billion Days, the response was good. "For us, this phase isn't just about sales numbers. It's about building trust and fostering a more profound connection within our community of users," said Madhav Sheth, CEO, Ai+ Smartphone.

India's smartphone market reached a five-year high in the festive third quarter of 2025 (3Q25), growing 4.3 per cent year-over-year (YoY) to 48 million units, according to the International Data Corporation 's (IDC) Worldwide Quarterly Mobile Phone Tracker. However, momentum was offset by weaker demand for entry-level Android smartphones and rising average selling prices (ASPs), highlighting the market's continued shift toward higher-value segments.

Vivo, OPPO and Samsung led the festive market with a share of 18.3 per cent, 13.9 per cent and 12.6 per cent, respectively.

Apart from established players, for new entrant Ai+, the season was a mix of organic and inorganic opportunities. "Festive demand is always a combination of both, but what stood out this time was the genuine consumer pull for the Ai+ Smartphone. Yes, platforms and partners ran their festive offers, but the real momentum came from customers who discovered the brand and connected with its design, performance, and privacy-first positioning. While incentives helped amplify visibility, the sustained demand we're seeing is due to trust and curiosity, not just discounts," Sheth added.

The eTailers relied heavily on discount-led sales of previous-generation flagship models from Apple and Samsung, which significantly boosted overall volumes. Aggressive festive promotions and flexible financing options drove strong shipment volumes in Q3 2025. "However, consumer demand remained concentrated in the premium segment, leaving the mass market under pressure and resulting in a significant inventory build-up heading into Q4 2025," said Upasana Joshi, senior research manager, Devices Research, IDC Asia Pacific.

"This surplus has been further exacerbated by rising component costs—particularly in memory—and currency fluctuations, prompting brands to raise prices post-Diwali. As a result, IDC forecasts a year-over-year decline in shipments for Q4 2025, leading to an overall annual contraction, with total smartphone shipments expected to fall below 150 million units for the year," she added.

Omdia in its last report, stated that sell-out traction of smartphones lags behind shipment growth, raising concerns of inventory build-up in Q4, especially after November.

However, Sheth is optimistic about Q4, "We have been very disciplined with inventory management. Real-time demand insights and agile supply chain planning drive our approach. Both online and offline channels are being closely monitored, and we continue to follow a demand-led supply model with lean inventory management. At this stage, inventory build-up is not a concern. The festive sell-through has been strong, and we are entering Q4 with a healthy balance across the channels," Sheth added.

Sustained offline growth over recent quarters was driven by festive season schemes and discounts, attractive trade partner margins for achieving sales targets, and strategic price adjustments by brands. While major eTailers also offered similar promotions, the deepest discounts were concentrated in the premium device segment, which in turn softened demand for entry-level and lower mid-tier Android smartphones.

For full-year 2025, Omdia, expect a modest decline, reflecting a fragile recovery cycle that remains highly sensitive to economic tailwinds and channel correction dynamics.