PC, smartphones to get dearer as rupee value falls

NEW DELHI: For laptop, tablet, desktop and smartphone buyers the time to buy the gizmo is now as these are set to get dearer by 5-12% by month end. For the high-tech product industry which works on low inventory (2-3 weeks) and low, single digit margins, the rupee has depreciated faster than it brings out new models into the market and this will see the gadgets becoming dearer by month end. 

Says Amar Babu, managing director, Lenovo India, "in less than a month the rupee has depreciated more than 8%. If it's a gradual depreciation we can plan out better. This has been sudden and will impact prices of computers, smartphones and and other electronic products." 

Tablets and smartphones are entirely imported and any rupee depreciation leads to higher prices for consumers. Says Ganesh Ramamoorthy, research director, Gartner India, "for buyers, tablets have been an economical alternative to desktops and laptops. The rupee having depreciated against the dollar Rs 53 to Rs 58 in less than a month, prices will definitely go up by month end. We see a 5-8% increase in prices oftypes of computers and smartphones, besides LCD TVs and digital cameras as well." 

As the industry has to bring out new models every eight to 12 weeks it does not hedge for a long period neither does it hold inventory for longer than 2-3 weeks, hence the imminent hike. Besides, currency fluctuations the computer and smartphones industry has been hit badly as component prices have appreciated significantly in the last couple of months. The cost of memory has gone up 35-40% and touch screens by 7-10%. In a computer memory is about 7-8% of the total cost. 

Says S Rajendran, chief marketing officer, Acer India, "it's a double whammy-rupee depreciation and component costs going up. This has come as a rude shock and computer prices will go up." 

Adds Rothin Bhattacharya, head of strategy, HCL Infosystems, "for hardware industry its been a tough two years during which the rupee has depreciated almost 30% ( Rs 43 to Rs 58 now)." 

The only silver lining for buyers is that companies will come out with more innovative schemes to help cushion the impact of higher costs for consumers. Says Gartner's Ramamoorthy, "companies will try and push products aggressively lest they are saddled with unsold inventory. Consumers can expect more cash back schemes and exchange offers to cushion impact of higher prices."