Tech prices surge: Phones, appliances set to cost more

Kolkata: Entry-level prices of televisions and smartphones are rising to levels seen 6-8 years ago, reversing the historic trend of falling tech prices, as manufacturers say they can no longer cushion price increases amid rising input costs and a weakening rupee.

Even mass-segment air conditioners, refrigerators and washing machines are set to hit record highs from next month, threatening demand.

"Prices are hitting record highs," said Kamal Nandi, head of appliances business at Godrej Enterprises. "There is concern that entry-segment demand could weaken unless a harsh summer boosts sales."

Entry-level 5G smartphone prices have risen from sub-₹10,000 around Diwali to ₹13,000-14,000 and are expected to cross ₹17,000-18,000 in the next quarter-back to FY21 levels, industry executives said. Some brands have indicated to the trade that prices could approach ₹20,000 in the next 2-3 months.

A 32-inch smart TV, priced at around ₹6,500 last year, now sells for ₹8,500 and is likely to touch ₹10,000 by May, matching 2017-18 levels.

A 3-star 1.5-tonne AC, popular among first-time buyers, is set to cost ₹37,000-40,000 from April, up from ₹32,000-34,000 last summer.

Typically, prices of entry-level electronics decline with scale and lower input costs, with brands absorbing hikes to protect demand. However, sustained increases in memory chip prices over the past 5-6 months, coupled with the Gulf war-led cost pressures and a weakening rupee, have reversed the trend.

Kailash Lakhyani, founder chairman of All India Mobile Retailers Association, which represents over 150,000 retailers, said brands such as Vivo, Oppo, Samsung and Xiaomi have indicated fresh price hikes of up to 10% on select smartphones.

"Some new models from Vivo and Samsung, despite similar specifications to predecessors, are priced up to 36% higher," he said, adding Vivo's sales team has indicated the entry 5G smartphone prices could reach 20,000 by June.

"The industry typically sees quarterly price cuts, discounts and cashback offers, but these are now largely absent, effectively raising consumer costs by another 10%," Lakhyani said.

This has impacted demand. Cellphone retailers said more consumers are opting for second-hand or refurbished devices, while others are delaying purchases.

The retailer body plans to again petition the government to cut GST on smartphones to 5% for models priced up to ₹20,000, from 18% currently, to support demand.

Smartphone and television prices have been rising every 30-60 days since November-December.