Fall in Rupee Leads to Hike in Smartphone Prices !

The free fall of Indian Rupee currency against major currencies like Dollar and Pound is a major cause of concern for the country right now. This will increase the price of already hiked commodities.
In the last one month, the US Dollar has appreciated from approximately Rs 59 to almost touching Rs 65, affecting most mobile phone vendors since majority of smartphones sold in the country are imported from China and elsewhere, with the transactions happening in US Dollars.

Samsung is probably the first smartphone vendor in the country to hike prices, but it certainly won’t be the only one. Samsung has announced the hike in prices of its phones by 4-5 percent across its smartphone portfolio. The price of Samsung’s flagship Galaxy S4 might increase by Rs 1,500, the Galaxy S III by Rs 1,800, the Galaxy Note II by Rs 2,495 and Galaxy Grand Duos by Rs 1,000 according to unverified data compiled by Price-Hunt.com.

According to The Economic Times on Tuesday, the entry level and mid level smartphone makers are the worst affected because competition in the top end and low cost feature phones is too intense and will make low-cost phones costlier. The mid-level and low-cost smartphones manufacturers will b worst affected.
However, prices at top end phones, such as Apple's iPhone or Blackberry's 10 platform phones, remain unaffected.
According to the company spokesman, Apple and Blackberry calculate the market variables like import duty and future currency depreciation of the local market when they launched their devices, and then fix a converted dollar price on them. Therefore, this depreciation in the value of Rupee does not adversely affect their margins. 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 four most important domestic players like Karbonn, Maxx Mobile, Lava International and Micromax, which amongst themselves control nearly 20 per cent of the Indian phone market, have till now, enjoyed an easy run. They used to buy smartphones components at cheap rates from China and only assemble them in India plus they sell them under their brands without investing much in R&D or manufacturing. They have already hiked the prices by 10 to 12 percent and are believed to raise it by another 5 to 10 percent. "We are carefully monitoring the situation," said Deepak Mehrotra, CEO at Micromax. He also added that if there is another depletion of rupee the company will be bound to raise the price again.They are the ones who are now facing the heat as they have to pay in dollars to buy smartphone components, the value of which have become dearer.While Nokia denied it has raised prices, Samsung, HTC and Sony said they were watching the rupee situation carefully.
The more sophisticated companies also found ways to mask higher prices, the dealers noted. New phones come in at higher price tags while the drop in older technology is not as steep as its dollar counterpart, while many companies have started cashback or exchange policies which make a price hike or drop hard to tell.

Even Sony India’s PlayStation chief, Atindriya Bose said that his team had decided upon an initial pricing structure for the PS4 in India at approximate price of Rs. 30,000 but now that has been scrapped to due to the escalating rate of the US Dollar.