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Smartphone prices to go up

Smartphone prices to go up
The rupee slide against the dollar is poised to push up prices of low-cost smartphones further, though top end players such as Apple and Blackberry are holding steady.

Worst affected are entry level and mid-level smartphone makers because competition in the top end and low-cost feature phones is too intense, say dealers.

The rupee fall against the greenback - 16% since May 1 - has affected mainly companies such as Karbonn, Maxx Mobile, Lava International, Micromax who buy handset parts in dollars mainly from China and assemble them in India.

Analysts say these companies have already raised prices by 10%-12% and a further increase of 5%-10% is anticipated. The four make up about 18% of India's market, according to Cybermedia.

Lava International co-founder and director SN Rai said that the company will increase prices of feature phones and smartphones by atleast 10% to protect their margins against the depreciating rupee. He added that the company's margins have been hurt by 10%-15% already.

Karbonn Mobiles will also increase prices by 5%-10% within this week across its handset portfolio, Shashin Devsare, executive director, said.

"We are carefully monitoring the situation," said Deepak Mehrotra, CEO at Micromax, adding that the company will raise device prices if the rupee falls any further from current levels.

However, prices at top end phones, such as Apple's iPhone or Blackberry's 10 platform phones, remain unaffected.

"Apple only prices its products once," said a person familiar with the company's internals. Apple at the time of pricing its devices factors in a calculated call on foreign exchange, import duties when putting a converted dollar price on its products for overseas markets, the person said. The additional margin hit it is willing to take varies from product to product.

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 more sophisticated companies have also found means to mask higher prices. The new phones come in at higher price tags; the drop in older technology is not as steep as its dollar counterpart and many a company have started cash back or exchange policies that make a price hike or drop tough to tell, say dealers.

Himanshu Chakrawarti, CEO of The Mobile Store, the country's largest cellphone retail chain, said that all brands, including Samsung, Sony, HTC, Nokia, have increased prices by 3-4%, though on selective models.

While Nokia denied it has raised prices, Samsung, HTC and Sony said they were watching the rupee situation carefully.

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