India’s smartphone market fell by 10% year-on-year last quarter to 43.5 million units, marking the lowest third-quarter shipment since 2019, and a high inventory pile-up is expected to lead to a muted fourth quarter, market research firm IDC said on Monday.

Despite the festival season beginning earlier than usual, the unrelenting rise in prices pulled down shipments in the world’s second-biggest smartphone market, IDC said.

The average selling price jumped 15% year-over-year, and 6% from the previous quarter, to a record $226, IDC said.

“The average selling price has grown consistently for the past eight quarters in a row due to increasing costs and growing 5G shipments at mid-premium price points,” said Upasana Joshi, research manager, client devices, IDC.

Moreover, the inventory pile-up and post-festive tapering in demand will lead to a muted fourth quarter, said Navkendar Singh, associate vice president, devices research, IDC.

IDC expects 2022 shipments of around 150 million units, a decline of 8-9% over the previous year, and Singh does not expect 2023 to be any better.

“The major challenges going into 2023 are the impact of inflation on consumer demand, increasing device costs, and slow feature phone-to-smartphone migration.”