Although the rupee recovered some ground in early trade today to 72.60 against the dollar, the overall free-fall in the year so far - which made it the worst performing Asian currency - has pushed up input cost for handset makers. So, the buzz is that smartphone buyers could be looking at a 5-8% hike in prices.
Chinese players like Xiaomi and Realme have already taken the lead on this front. Xiaomi, for instance, had launched Redmi 6 and 6A at introductory prices, but has now raised prices for both the models by up to Rs 600. In a statement the company said that the rupee has depreciated by 15% since the beginning of the year, which has resulted in a "significant rise in input cost" to the company, and it is making the price adjustment to offset the impact of the weakening rupee.
Citing analysts, The Economic Times reported that other handset makers are likely to follow suit and increase prices of existing models. "I think we should expect Samsung, Oppo and Vivo to increase prices, too. This is just a start given that rupee doesn't seem to be coming down," Navkendar Singh, associate research director, IDC India, told the daily. According to him, most of the brands were waiting for a bigger player to take the lead, and Xiaomi being the leader, has increased prices in the volume segment.
While Singh predicts that brands may raise prices in the range of 5-8%, Tarun Pathak, associate director at Counterpoint Research, does not expect the price rise to exceed 5%.
According to Pathak, a lot of inventory has already been cleared, and companies will factor in rupee depreciation for the new inventory. Counterpoint data plots October as a record month in terms of sales, contributing to 60% share. "About 60-70% of the demand was fulfilled during the Diwali festive period. A lot of customer spending has already taken place," Pathak explained.
Industry experts say that the currency situation may lead to a lot of marketing gimmicks, where brands launch products at introductory prices for a week or so, and then revise prices upwards. Again, just like Xiaomi.
Edited by Sushmita Agarwal