Market chief Xiaomi mentioned a worth hike was ‘inevitable’ and Samsung, Vivo, Oppo and Realme are more likely to go on sure price burden to the customers because the scarcity is now spreading to different parts past chipsets and shows, leaving little room for additional absorption by manufacturers.
ET reported in September final 12 months that the price of show panels for handsets has nearly doubled within the world market attributable to sudden outburst in demand for telephones. However most just lately, reminiscence chipsets are seeing 20% enhance in price, battery packs costs have risen by 10% and others, together with digital camera modules and sensors, are additionally costlier by 5%, business consultants mentioned.
“Whereas we’ve got tried to soak up the rising prices, with the greenback appreciating – we foresee an inevitable enhance in costs of smartphones within the coming days,” Xiaomi spokesperson instructed ET.
“Regardless of these modifications, we at Mi India proceed on our promise of preserving lower than 5% of revenue margin on each smartphone offered in India,” he mentioned.
Home manufacturers Lava and Micromax mentioned entry-level, finances smartphones and have telephones can be the worst hit, the place the share contribution of parts in scarcity to general BOM is highest and margins comparatively decrease.
The beneath Rs15k worth section of smartphones account for 80% of general gross sales in India.
Tejinder Singh, head, product, Lava International, mentioned there was an “unprecedented” enhance in BOM price of smartphones currently. Price of parts like chipset, LCD driver IC chips that are in extreme scarcity have gone up by 20-100%, various by suppliers.
“Manufacturers have been rising the smartphone costs by 5-7% and absorbing the remainder enhance in the interim. Lately greenback has additionally elevated to Rs 74.5-75 ranges, which is a further problem for the manufacturers,” Singh mentioned.However improvements in product design helped Lava to regulate the price and go on a minimal hike of 4-5%, he added.
“Whereas we’re assessing the state of affairs intently and it’s tough to establish the precise impression, we’re in for India and can be sure that a minimal burden is handed on to the customers,” mentioned Micromax co-founder Rahul Sharma.
Quick-growing smartphone firm Realme mentioned whereas some manufacturers have been passing on the worth hikes to prospects, Realme remains to be evaluating the state of affairs.
Samsung, Vivo and Oppo didn’t reply to ET’s question until press time.