Phones get cheaper, spares don't
Thursday, 24 April 2008, 01:40 IST
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New Delhi: Mobile phone prices have crashed down drastically in the recent past. In March 2007, one needed to pay Rs 22,000 to buy a Nokia N73m, but earlier this month, the price tag on N73 has shrunk to Rs 12,000. However its battery price remains unchanged at Rs 2,250. So instead of replacing the battery of one's old phone, he could buy a new handset, reported The Economic Times Mobile phones prices have come down between 25 percent and 40 percent in the last one year, but spare parts remain more or less where they were. Privately, several mobile handset makers said that they prefer to keep the prices of spare parts and batteries high so that customers go for new handsets- a carefully crafted strategy to push handset sales! Since spares account for a very small part of the revenues of a mobile handset maker, low sales in this segment do not affect them significantly. KPMG Advisory Executive Director Romal Shetty reckons that for a large mobile manufacturing company, the revenue from spare parts would be less than 5 percent. "The mobile components usually do not see a price drop like phones, which is due to the fact that the margins are lower in this market," said Motorola Mobile Devices Director (marketing) for India and South-West Asia Lloyd Mathias, adding: "Components are service products and not the main product; handsets will always be the main priority for us." Mobile handset retailers said that there has been a nominal decline of Rs 100-500 in the prices of panels and battery prices have softened by Rs 50-100 in the last one year. Industry experts said that the cost of components like battery have declined a little with the shift of manufacturing to low-cost countries like China. Unlike in the past when batteries and panels were mostly manufactured in European countries like Finland, now, large companies like Nokia and Sony Ericsson are shifting their units to East Europe and Asia. This may further pull down their prices in the coming days.
Source: IANS
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