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New Delhi: Smartphone industry tracking firms such as Counterpoint Research and Omdia have revised their forecasts for India’s annual shipments for the second time amid the ongoing West Asia conflict, which is expected to depress demand further.Counterpoint Research scaled down its forecast for 2026 to 139 million units from 142 million projected earlier this year, while Omdia revised its numbers to 142-145 million from 148 million, with analysts cautioning that the developing situation might necessitate further downward revisions in the next quarter. IDC 's estimates remain the most conservative, with the research firm expecting shipments to decline to 132 million in 2026 from 152 million in 2025. The second downward revision by analysts for the year also factored in the impact of the memory and storage supply crunch , which spell a double whammy for the industry. These are the sharpest cuts in forecast the industry has seen since the Covid-19 pandemic. Industry executives said the situation is expected to worsen in the second half of the year if the conflict continues.The US-Israel war on Iran is likely to have a cascading effect, with high inflation in essential goods expected to hit discretionary purchases, according to industry executives and experts. “The current market scenario is a bloodbath and the second half of the year will be even worse,” said Upasana Joshi, research manager, IDC India.“The Iran-Israel conflict is creating a layer of uncertainty, and in such environments, consumers tend to delay discretionary purchases like smartphones," said Tarun Pathak, research director, Counterpoint Research.He said the market is seeing early signs of weakening demand, especially in the massmarket segments, with brands turning more cautious and tightening inventory, working closely with retailers on targeted schemes, offering selective margin support and increasingly relying on in-store promoters to convert walk-ins in a tougher demand environment.Omdia analyst Sanyam Chaurasia said the second half of 2026 looks grim as the ongoing conflict will drive up oil and logistics costs. This will heavily impact agricultural output and rural incomes, with the rural market likely to suffer more than the urban market this year as a result. He added that due to weak consumer demand and rising prices, offline retailers are pushing back against brands and refusing to stock excess inventory.The West Asia conflict represents the second challenge for the smartphone industry this year, after nearly every brand was forced to raise prices after key components such as memory and storage saw a 40–50% yearon-year surge in prices due to strong demand from AI data centres, which forced suppliers to pivot production lines. With trade routes in West Asia blocked, the component supply chain is expected to be hit further, exacerbating the shortage of components.“Helium is an essential component required by companies like TSMC Samsung and Micron for manufacturing wafers and processors. Qatar is one of the major suppliers, and the country has recently halted its gas shipments, potentially due to undisclosed damage at their facilities,” an electronics industry veteran told ET. Shortage of such key gases and chemicals is expected to raise production costs even further, which will be transferred to the end consumers, IDC’s Joshi said.