Declining rupee may push mobile prices up by up to 10%

Come July, mobile phone prices are expected to be higher by up to 10% due to the steep depreciation in the value of the rupee against the dollar.

india Updated: Jun 20, 2013 20:33 IST

Come July, mobile phone prices are expected to be higher by up to 10% due to the steep depreciation in the value of the rupee against the dollar.

"Brands dependent on import will have to take price increase of about 10% due to decline in value of the rupee. Companies making mobile phones in India will be impacted to a lesser extent but they will also have to increase prices by 5 to 6%," Indian Cellular Association's (ICA) national president, Pankaj Mohindroo told PTI.

The rupee hit a life time low of 59.93 to a dollar in early trade today before closing at 59.57.

"We have no other option but to increase the price. In the next couple of days, we will be increasing the handset prices by around 10%," Lava International co-founder and director SN Rai said.

Though Nokia did not offer any comment, Samsung said that it has not made any change in the price of handsets yet and is "holding onto the price lines for the moment". Mohindroo said that "price hike in products will be visible from July".

Multinational brand Lenovo said that it may raise its mobile handsets prices in the range of 5 to 8%.

"We are looking at the price situation and we would have to raise the price in the coming weeks. The hike could be in the range of 5-8%," Lenovo India MD Amar Babu said.

Most of the Indian brands like Micromax, Lava Mobiles and Karbonn sell imported handsets at relatively low prices.

Micromax expressed disappointment on the continuous decline in the value of the rupee and said "we are carefully monitoring the situation and are hopefully expectant of the trend to reverse, however if not, like the fuel prices, the device costs will also have to undergo price correction".

Datawind, maker of cheapest tablet PC Aakash, said fall of the rupee will have a direct impact on the price of tablets.

"We have seen a 30% loss in the rupee's value from 44 to almost 60 in the last 24 months. This gets reflected directly in price increases to the consumer, reducing affordability for the masses," Datawind CEO Suneet Singh Tuli said.

Like Lenovo, international brands like BlackBerry, HTC, Lenovo and Panasonic also import handsets from their units abroad to sell in India but no inputs were received from these firms.

"We are watching the situation...we are yet to take a position on pricing," HTC country head Faisal Siddiqui said.

Retailers also admitted that the prices of IT and electronic goods, including mobile phones, will go up soon.

"The fall of the rupee will have an adverse impact on the electronic goods and IT products market. We see a likely increase in prices by about 5 to 10% in the coming weeks and this will have a direct hit on the consumer's pocket," House of Technology's director Vipul Jain said.

Mohindroo said that the only long terms solution to respond to the declining rupee for India is "to develop the indigenous electronic system design and manufacturing industry and value addition should be done in India".

First Published: Jun 20, 2013 20:29 IST