Thinking of shopping for a desktop? Well, if you wait, you might just have to shell out more. The rupee's losing streak against the dollar has significantly pushed up input costs for PC-makers over the last few weeks, setting the stage for a price hike soon.
Leading players including Acer, HCL Infosystems and Lenovo admit that not all of the rise in input costs can be absorbed by manufacturers. Although the vendors themselves are unwilling to comment on the extent of price hike, industry sources say a 4-6 per cent increase could result if a player decides to pass on the entire burden to the consumers. Of course, it could vary from player to player.
Import of components
“The depreciation is quite high and since most of the components are imported, the costs have gone up. We will try to minimise what we need to pass on to customers but at the same time we will not be able to absorb the full cost increase,” Mr Amar Babu, Managing Director of Lenovo India, said.
Since the PC industry relies heavily on import of IT components and inputs (hard drive, memory, display amongst others) for product manufacturing, price of the finished product closely tracks the currency movement. On Thursday, the rupee fell past 49 against the dollar, to its weakest in nearly 25 months. The Acer India Chief Marketing Officer, Mr S. Rajendran, said the company is “definitely contemplating a price hike and a decision on the same will be rolled out over next week to 10 days.”
The price review extends across the board, to all types of products - desktops, tablets, netbooks, notebooks and monitors.
Mr Rothin Bhattacharya, EVP, Marketing, Strategy & Business Development, HCL Infosystems, assures, “This would not be a substantial price increase. Moreover, we will be looking at ensuring that where the increase is being passed, so is the benefit, when the move is in favour of the rupee.”
Price correction
“The rupee depreciation has been fairly rapid…A price correction (in products) will happen, and prices will move up,” the MAIT President, Mr Sandeep Nair, said, adding that inflation and interest rates were turning out to be big concern areas for the hardware industry.
During FY11, the total PC sales in India rose 16 per cent to 9.31 million units. The desktop sales stood at 6.03 million units, a growth of 9 per cent. The notebooks and netbooks taken together recorded a consumption of 3.28 million units, about 31 per cent higher than the previous fiscal, says hardware association MAIT.