Duty Hikes, Weak Rupee to Make Smartphones More Expensive in India

In the wake of the depreciating rupee and rising input costs, few have already increased prices of their handsets.

The weak rupee and rising input costs are going to force smartphone vendors raise prices of their devices in India in the coming months, the International Data Corporation (IDC) said on Thursday.

With the duty hikes in place and the dollar fluctuation, smartphone vendors are expected to raise prices of devices in the coming months rather than absorbing the cost or clocking it under cash backs and financing schemes.

Navkendar Singh, Associate Research Director, IDC India

In the wake of the depreciating rupee and rising input costs, RealMe and Xiaomi have already increased prices of some of their handsets.

Xiaomi increased the prices of its budget smartphones Redmi 6 and Redmi 6A, along with Mi Powerbank 2i and Mi TV (32-inch Pro and 49-inch Pro variants).

Online-focused Chinese smartphone maker Realme increased the prices of its two popular budget handsets in India. The Rs 6,999 RealMe C1 is now priced at Rs 7,999 while Rs 8,990 RealMe 2 (3GB variant) is priced at Rs 9,499.

Meanwhile, the IDC "Quarterly Mobile Phone Tracker" said on Thursday that Chinese smartphone maker Xiaomi shipped 11.7 million units and became the top brand in the Indian market with 27.3 percent share in the third quarter this year, with Samsung at second spot.

The smartphone market in India reached an all-time high of 42.6 million unit shipments in the third quarter (ending 30 September), registering a 9.1 percent year-on-year (YOY) growth.

This is the first time when the smartphone market is at par with the feature phone market, each contributing 50 percent to the overall mobile phone market, the IDC said in a statement.

According to Upasana Joshi, Associate Research Manager, Channel Research, IDC India, shipments in the third quarter were primarily driven by the eTailer channel in the run-up to the festival season.

eTailers continued to drive affordability with multiple financing options such as zero or low-cost EMIs (equated monthly instalments), buyback guarantees and cashback on debit/credit cards.

Upasana Joshi, Associate Research Manager, IDC India

Xiaomi grew to a new high on the back of its successful Redmi 5A and Redmi Note 5 Pro series and refreshed Redmi 6/A/Pro portfolio, said the report.

"Samsung registered an annual growth of 4.8 percent in 3Q18 at the back of its 'Infinity' series model 'Galaxy J6' followed by Galaxy J2 (2018), J8, J4 and the recently launched Android Go Model Galaxy J2 core with a middling demand," the IDC report added.

Vivo continued at third position with a growth of 35.4 percent.

The offline segment registered a slower annual growth of 6.6 percent in the third quarter.

Commenting on the premium end of the market (above Rs 30,000), Joshi said that OnePlus climbed to the leadership position at the back of OnePlus 6, surpassing Samsung and Apple in the third quarter.

With a 2.1 percent (YoY) growth, the feature phone market registered shipments of 43.1 million units in the 3Q 2018. Shipments for Jio Phone continued to decline as the vendor focused on clearing existing channel inventory, said the report.