Even as Apple touts India as its next big growth area, clouds are gathering over the country's smartphone market. Industry figures show that handset sales in the country have fallen to the lowest level since 2019. It comes even as the technology giant's boss says India is at a "tipping point" with its expanding middle class. While Apple, which last month opened its first two stores in India, grew its market share - cheaper rivals are struggling to sell their phones. According to research firm the International Data Corporation (IDC), 31m smartphones were shipped in India during the first three months of this year. That was 16% lower than in the same period of 2022 and the lowest first-quarter shipments in four years. IDC highlighted that the sluggish demand came amid an uncertain economic outlook and as stockpiles of handsets remain high. It also said that India's overall smartphone market will be flat this year after three quarters in a row of falling sales. At the same time some analysts have pointed to the growing trend of "premiumisation" - when wealthier consumers move towards more expensive products. "The premium segment's share almost doubled" in the first three months of this year compared to a year ago, according to Prachir Singh from technology market research firm Counterpoint. However, as brands like Apple and Samsung benefit from this trend, demand for cheaper handsets made by companies like China's Xiaomi and Realme has been hit by the tough economic environment. That end of the market is suffering as users take longer to upgrade their handsets, experts say. The stark contrast between Apple's fortunes and the shrinking market for cheaper devices also reflects an uneven post-pandemic recovery in Asia's third largest economy. "The K-shaped recovery is not allowing the consumption demand to become broad-based nor helping the wage growth especially of the population belonging to the lower half of the income pyramid," India Ratings and Research said. "As a result, while there is visible demand for high-end automobiles, mobile phones and other luxury items, demand for items of mass consumption is still subdued," it added. For example, sales of entry-level scooters were down by almost 20% in April this year, compared to the same month in 2019, before the pandemic hit. This indicates that lower income customers "were are still hesitant to upgrade," according Manish Raj Singhania, the president of the Federation of Automobile Dealers Associations. It also reflects the on-going problems in India's rural economy, which have been worsened by extreme weather events. Lack of demand in rural areas has also been driving the decline in the consumer goods, like snacks and fizzy drinks, where growth has dropped to single figures after a year and a half of double-digit increases. Household spending on goods and services, which had grown 20% year on year in March 2022, has also slowed sharply this year. That came as India's consumers have been squeezed by rising interest rates and stubbornly high inflation. Overall, the country's economic growth slowed to 4.1% for the first three months of 2023, the lowest growth for a year, official figures show.