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Re fall may push up mobile phone prices, say handset makers

Author: PTI/Friday, August 17, 2018/Categories: Currency

Re fall may push up mobile phone prices, say handset makers

New Delhi - Prices of mobile phones, especially the entry-level variants, could go up in the coming days as the continuous fall in rupee will hike input costs, according to handset makers.

"Looking at the market scenario at the moment, with the increase of dollar, which is even expected to rise further, the cost incurred in mobile handsets will increase and this will lead to an overall hike in the final cost of the handsets," Intex Technologies (India) Director Nidhi Markanday said.

Sanjay Kalirona, CEO and Director of COMIO India, said the Indian mobile handset industry is already under tremendous pressure with the increase in cost of raw material and custom duty.

"We are currently operating on very thin margin. With the strengthening of the dollar versus rupee, the pressure on bottom line has further increased," he pointed out.

Kalirona added that the company is reviewing the impact of the situation and will take a decision on pricing post that.

Continuing its slide, the rupee today slumped 43 paise against the dollar to trade at an all-time low of 70.32 on strong demand for the US currency.

India Cellular and Electronics Association Chairman Pankaj Mohindroo said there has been some cushioning because of negligible CBU (completely built units) import into India as significant value addition is being done locally.

"The challenge is in the entry-level mobiles where the impact is direct and cannot be absorbed. This segment, unfortunately, is in the middle of hyper competition and the headroom for price increase is very difficult," he noted.

India is among the fastest growing handset markets globally, especially for smartphones.

According to research firm IDC, smartphone shipments totalled 33.5 million units in the second quarter of 2018, a growth of 20% year-on-year. The feature phone market saw shipments of 44 million units in the said quarter, a growth of 29% over the year-ago period.

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