The market for budget smartphones is facing significant contraction. A report from Counterpoint Research suggests that more than 230 million annual smartphone shipments priced below $200 (Rs 20,000) are expected to disappear globally between 2025 and 2030, marking a contraction of about 40% in this segment by the end of the decade. This decline occurs despite an overall rebound in total worldwide smartphone shipments returning to levels seen in 2025.
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The shrinkage in the budget smartphone tier is attributed to lasting effects from the anticipated industry downturn in 2026–2027. Rising costs for mobile chipsets and memory, along with higher hardware requirements and phone manufacturers reducing unprofitable models, have made the production of entry-level phones increasingly difficult. As production costs rise due to component prices, manufacturers find it challenging to sustain affordable devices.
Consumers are adapting in several ways, opting to delay upgrades and keep their current devices longer. Some are turning to certified refurbished and second-hand phones, while others are moving into higher-priced tiers through installment plans.
Yang Wang, Principal Analyst at Counterpoint Research, noted that while the overall smartphone market is set to recover in terms of units shipped, the affordable segment is unlikely to regain its previous prominence. Opportunities are shifting towards better-spec mainstream devices and premium products, although higher-end segments cannot fully compensate for the loss of budget market volume. This will result in a market that remains similar in size but different in value and competition.
The report also highlights concerns about connectivity, as the reduction in affordable smartphones could hinder the ability of first-time users in lower-income markets to access the internet. With fewer sub-$200 options available, transitioning from basic feature phones to personal smartphone ownership could slow significantly.
Counterpoint forecasts that total smartphone shipments will rise to about 1.20 billion units by 2030, nearing 2025 benchmarks. However, stagnation in the mid-range market indicates that volume in the budget tier will not easily shift upward, further complicating affordability and access issues across developing and lower-income markets.