Mobile phones will cost more now.
With the continuing rupee depreciation, Indian mobile handset makers such as Nokia, Samsung, Blackberry and Sony Ericsson have increased the prices of their products across models, be it smart, feature or mass phones.
Though the handset prices have gone up, the prices of these products in the domestic market are still below those ruling in the global markets, says V. Satish, Chairman of Univercell.
According to Mr. Satish, there has been an average price increase of Rs.50 in the basic phone category. This segment, however, did not see any dip in sales during the downtrend phase of the rupee. In the feature phone segment (in the price range of Rs.4,000 to Rs.6,000), buyers are generally value seekers. Prices have gone up by 10-15 per cent in this segment. Sales in this category have been seeing a dip.
In the smart phone segment (above Rs.6,000), the prices have gone up by Rs.300 to Rs.500. The overall sales, however, have been growing by 25 per cent. Sales are expected to grow further, he says.
In the last five years, prices of mobile handsets have only been going down. Thanks to fast-changing technology, every company has been coming out with newer models almost every week.
As a result, the price erosion in the existing models has become inevitable. Besides, older models get phased out from the market. This trend resulted in both mobile phone marketers and marketers keep limited inventory. “They do not carry stock for more than two weeks,'' says Mr. Satish.
With the falling rupee, many mobile manufacturers have to increase the prices in the wake of rise in import prices of components. “Any change in the rupee or the dollar value, the consumer ends up paying a little more,'' says Verghese M. Thomas, Director Corporate Communication (India), Blackberry.
Almost 80 per cent of the mobile handset components such as covers, keymates, chargers, prints and packs, antennas, display panel, battery and PCBs are imported. According to industry sources, certain high-end models contain higher level of import contents. In value terms, it works out to 90 per cent. This is despite the fact that most handset makers import at least their top-end models as CBUs (completely built units). This is where the company losses the most money, they say.
In the case of Blackberry, the company has increased the prices by 6-10 per cent last week. Samsung, the second major player with over 20 per cent share in the domestic market after Nokia, increased the prices by 3 to 5 per cent across models.
According to Ruchika Batra, General Manager, Corporate Communications, Samsung South West Asia, the price hike, in absolute terms, works out to an increase of Rs.40 to Rs.800.