The Indian smartphone market is facing a potential challenge, despite Apple's bullish predictions of growth in the country. Recent data shows that handset sales have declined to their lowest levels since 2019, even as the company's CEO has said that India is on the brink of a significant expansion of its middle class.

While Apple has increased its market share, cheaper competitors are struggling to sell their products. In the first quarter of this year, approximately 31 million smartphones were shipped to India, according to research company the International Data Corporation (IDC).

Amidst an uncertain economic outlook and high stocks of handsets, India's overall smartphone market will be flat this year with first-quarter shipments falling to the lowest level since 2019, at 16% lower compared to last year.

Analysts attribute this to the trend of "premiumisation" where wealthier consumers opt for more expensive products, leading to a doubling of the premium segment's share in Q1 2023.

However, the rising popularity of premium brands such as Apple and Samsung has taken a toll on cheaper handset sales, particularly those made by Xiaomi and Realme. Experts suggest that users are taking longer to upgrade their handsets, causing the shrinking demand for cheaper devices.

This dichotomy between Apple's growth and the declining market for cheaper smartphones reflects an uneven post-pandemic recovery in India's economy.

Despite visible demand for high-end products such as luxury cars and smartphones in India, the market for mass-consumption items has remained subdued.

The ongoing decline in demand for entry-level scooters, consumer goods, and household spending on goods and services indicates that lower-income customers are hesitant to upgrade.

India's rural economy, which has been impacted by extreme weather events, has also contributed to the decline. In addition, rising interest rates and inflation have squeezed India's consumers. This has resulted in economic growth slowing down to 4.1% in the first quarter of 2023, which is the lowest growth rate in a year.