Smartphone prices NOT coming down as widely reported

“TV prices also not coming down!

We noticed wide reporting in print and online media quoting that mobile phones will be cheaper after the Union Budget announcements. Apparently, sections of media took a ‘cue’ from the FM’s budget speech that “Duty concessions are also being given to camera lens of mobile camera module and certain other items and this will enable domestic manufacturing of high growth electronic items” and without waiting for a considered explanation, they jumped the gun. Prominent national TV channels continued showing it in their tickers, causing turbulence in trade and industry because consumers were expecting the same. On top of it, some ‘analysts’ also gave authoritative statements, even quantifying the so-called price drop!

On TV’s also, though not to that extent, misreporting happened that prices are coming down.

Factsheet:

Mobile Phones: The removal of duty on the Camera lens and its inputs from existing 2.75%, this will not have any significant impact the price of final product price.

LED TV’s: In case of LED TVs also, the 2.5% of BCD reduction on “inputs of open cells” will also have an insignificant impact on the price of the product i.e, approx. 0.35% of the value.

It is significant to mention that the manufacturing of Open Cells is highly capital-intensive and has an average lead time of approx. 12-18 months, So to clarify, there will be no impact on the cost of LED TV’s in the near future.” A tweet by Pankaj Mahindroo, Chairman, India Cellular & Electronics Association

CT Bureau