The smartphone market in India is gearing up for a major transformation in 2026-27, with artificial intelligence (AI)-driven devices, premium features and local manufacturing taking centre stage. Based on industry trends, the market is expected to shift from volume-driven to value-driven growth, led by agentic AI, 5G and innovative camera technologies.
These industry trends started to take shape in 2025. The success of the India Mobile Congress 2025 highlighted the country’s rapid 5G adoption and its preparedness for leading the next generation of 6G and AI technologies.
As we move further into the year, the key trends that are expected to dominate the industry will be native on-device AI for a more secure and personalised experience, agentic super-apps to manage routine tasks, a preference for premium models with high-end features, 5G as baseline, eco-friendly and repairable handsets, innovations in camera technology and holographic displays.
A look at the smartphone trends that will redefine the Indian market in 2026…
On-device AI
On-device AI implies running algorithms locally on the phone rather than depending on cloud computing. By doing so, on-device AI can enable near-instantaneous, real-time decision-making, improve security and offline functionality, enhance privacy and bring down cloud data transfer costs. It can be executed directly on end devices, such as smartphones, wearables (like smartwatches) or even home appliances. For instance, Samsung has integrated Galaxy AI on its Galaxy S26 and S26 Ultra for autonomous task execution, Google’s Pixel 10 Pro uses the Tensor G5 chip for Gemini Nano features, Apple’s iPhone 17 Pro Max is enabled with Apple Intelligence for on-device generative features, while OnePlus 13 offers affordable on-device AI capabilities powered by the Snapdragon 8 Elite chipset.
Agentic super apps
Agentic AI is emerging as a solution to address the gaps in GenAI. While most GenAI tools, such as copilots, chatbots and assistants, do not delve deep into the context and as a result do not transform end-to-end business processes, agentic AI is more goal-oriented and equipped to take action across systems. For instance, an agentic AI system can identify high-intent leads from customer relationship management data, launch personalised outreach emails, reply to follow-ups and even book demonstrations, all this without any human intervention.
2026 will witness a shift from generative AI (which creates content) to agentic AI, which acts autonomously to complete multi-step tasks across apps and services. Instead of merely prompting a chatbot, users will be able to delegate tasks such as travel booking, calendar management and complex photo editing to AI agents embedded in the operating system. Samsung is already using agentic AI for Bixby, its voice assistant, and Galaxy AI for its Galaxy devices. It has upgraded Bixby into a “conversational device agent”, which allows it to manage multi-step tasks in the background, such as opening an app like Uber, filling in details (pickup/destination) and booking, with minimal user interaction.
Google is employing agentic AI for Gemini and Android. Gemini has been more deeply embedded into Android, allowing it to act on user intent across apps, rather than simply operating as a search engine. Meanwhile, Apple’s move towards agentic AI focuses on enabling Siri to use on-device, contextual data to anticipate user needs, such as managing emails, calendars and app actions autonomously. Smartphone companies such as Nubia are marketing devices that integrate AI directly into apps, replacing traditional app-by-app navigation. Nubia (under ZTE) has launched the Nubia M153, designed as an agentic AI phone, in collaboration with ByteDance’s Doubao AI assistant. It features “OS-level agent capabilities”, enabling AI to navigate the phone like a human – opening apps, making calls and booking services like travel or cab rides, rather than just acting as a simple voice assistant. The company is also developing the Z80 Ultra, described as a “gateway-type AI phone” with native OpenClaw AI integration, which automates tasks within the operating system.
Ericsson and other network providers are utilising agentic AI for autonomous 5G networks, where AI agents manage performance, prioritise traffic and optimise energy usage in real time. Meanwhile, Telefónica and Nokia are piloting agent-to-agent protocols to streamline network application programming interfaces, allowing agents to negotiate services without human intervention.
Premiumisation
In the coming year, industry players are expected to focus on high-end features, such as 200 MP cameras and periscope lenses, driving growth in the premium segment. This trend can be seen as a survival strategy to counter flat sales volumes, which, in turn, will drive profitability amid rising memory and silicon costs.
Competitors are enhancing hardware and build quality through material innovation, such as aerospace-grade titanium, gold plating and exotic materials, to differentiate top-tier phones and elevate their tactile experience and luxury status. They are also offering long-term ownership value through extended software support and improved service experiences while expanding the financing ecosystem through no-cost EMIs, aggressive trade-in programmes and bank deals.
Vertu, Apple and Samsung are leading the luxury phone market in India. These brands offer devices with titanium cores, gold accents, sapphire crystal and luxury leather finishes. Apple’s iPhone 15 Pro and iPhone 16 Pro models feature a Grade 5 titanium frame, and the METAVERTU and Agent Q lines flaunt aerospace-grade titanium, gold-plated internal components and exotic leathers. While Apple and Samsung are using aerospace-grade titanium for durability and lighter weight, Realme and Vertu are utilising advanced ceramics for a sleek feel. Meanwhile, gold plating/customisation is popular in the luxury market in India, with firms offering 24k gold-plated versions of premium phones such as the iPhone 16 Pro Max.
The Xiaomi 15 Ultra features a 200 MP periscope camera and specialised, in-house imaging pipelines for high-end photography. The company is expanding its portfolio with wearables, TVs and IoT devices to increase its average selling price and build brand loyalty, aiming for the sale of multiple products per household. To further drive higher profit margins and absorb rising component costs, companies are also launching pro/ultra variants.
Holographic displays
As companies transition from flat screens to immersive 3D experiences, they are deploying holographic technology for user engagement and brand marketing. Some of the key trends are anamorphic displays for product launches, compact projector technology for future smartphone applications and in-store holographic boxes. Xiaomi has been an early mover in this segment, having already deployed Hypervsn and PRISMOX anamorphic hologram displays in cinemas and malls for its Redmi Note 14 Pro+ 5G campaign. Further, there have been advancements in nanophotonics and micro-LED technology for smartphones to project 3D images, enabling users to view holographic content without glasses. The market for 3D holographic display is growing as companies increasingly adopt these solutions to deliver interactive experiences. According to the Holographic Display Market Size Report by Mordor Intelligence, it is projected to expand from $2.85 billion-$4.83 billion in 2023–2025 to over $17 billion-$33 billion by 2032–2034 globally.
Local manufacturing and sustainability
India is the world’s second largest mobile phone producer, and over 99 per cent of phones sold domestically are locally manufactured. The Make in India initiative is further strengthening this shift, with local industry players shifting from semi-knocked-down practices to completely knocked-down processes. This approach is enabling the localisation of high-tech components such as display assemblies, camera modules and touch panels. Manufacturers are also reducing their reliance on chip imports, supported by government efforts to improve domestic semiconductor sourcing and the approval of five key projects. The industry is transitioning from a high-volume assembly model to a high-value, eco-conscious ecosystem. Apple is scaling up its production capability in partnership with Tata Electronics, Foxconn and Pegatron, and aims to manufacture a major portion of its global iPhones in India by the end of 2026. Besides, Samsung and local players such as Lava are firming up their production plans. These industry efforts are expected to position India as a key export hub for high-value smartphones.
The government’s production-linked incentive (PLI) 2.0 scheme is rewarding companies that increase exports and invest in research and development rather than only expanding assembly volume. The coming year will see domestic manufacturers launch independent smartphone brands, offering higher-value, indigenously designed phones, supported by an evolved ecosystem of local suppliers.
Eco-friendly designs, recycled materials and repairable phones are likely to gain traction, thereby reducing costs. Samsung is utilising recycled fishing nets/plastics in device components, cutting down the use of single-use plastics, while Nothing has used 100 per cent renewable electricity for assembling its Phone (3). Further, industrial zones in Noida and Tamil Nadu are adopting zero waste-to-landfill protocols to minimise waste and promote environmental sustainability.
In sum
The coming year is likely to see a surge in smartphones that are greener, smarter, highly connected and more deeply integrated into users’ personal and professional lives. However, rising input costs may make these devices less affordable. The changing smartphone landscape will also alter the way we work and manage daily tasks. As per industry predictions, handset companies will increasingly focus on offering maximum value through software integration, placing less emphasis on pure hardware specifications.
Anagha Bhambri
