Rupee fall: Smartphones prices to go up
Times of India |
The
rupee slide against the dollar is poised to push up prices of low-cost
smartphones further, though top end players such as Apple and Blackberry
are holding steady.
Worst
affected are entry level and mid-level smartphone makers because
competition in the top end and low-cost feature phones is too intense,
say dealers.
The rupee fall against the
greenback - 16% since May 1 - has affected mainly companies such as
Karbonn, Maxx Mobile, Lava International, Micromax who buy handset parts
in dollars mainly from China and assemble them in India.
Analysts
say these companies have already raised prices by 10%-12% and a further
increase of 5%-10% is anticipated. The four make up about 18% of
India's market, according to Cybermedia.
Lava
International co-founder and director SN Rai said that the company will
increase prices of feature phones and smartphones by atleast 10% to
protect their margins against the depreciating rupee. He added that the
company's margins have been hurt by 10%-15% already.
Karbonn
Mobiles will also increase prices by 5%-10% within this week across its
handset portfolio, Shashin Devsare, executive director, said.
"We
are carefully monitoring the situation," said Deepak Mehrotra, CEO at
Micromax, adding that the company will raise device prices if the rupee
falls any further from current levels.
However, prices at top end phones, such as Apple's iPhone or Blackberry's 10 platform phones, remain unaffected.
"Apple
only prices its products once," said a person familiar with the
company's internals. Apple at the time of pricing its devices factors in
a calculated call on foreign exchange, import duties when putting a
converted dollar price on its products for overseas markets, the person
said. The additional margin hit it is willing to take varies from
product to product.
Blackberry launched new
phones in the last couple of months, when the rupee was already moving,
said the company spokesman, implying that the company would have taken a
view on the rupee impact on these devices while pricing.
The
more sophisticated companies have also found means to mask higher
prices. The new phones come in at higher price tags; the drop in older
technology is not as steep as its dollar counterpart and many a company
have started cash back or exchange policies that make a price hike or
drop tough to tell, say dealers.
Himanshu
Chakrawarti, CEO of The Mobile Store, the country's largest cellphone
retail chain, said that all brands, including Samsung, Sony, HTC, Nokia,
have increased prices by 3-4%, though on selective models.
While Nokia denied it has raised prices, Samsung, HTC and Sony said they were watching the rupee situation carefully.
