Will smartphone prices decrease after Budget 2024? Don’t expect any major surprise
Finance Minister Nirmala Sitharaman announced a decrease in the Basic Customs Duty (BCD) on smartphone components like printed circuit boards and mobile chargers from 20% to 15% in the Union Budget 2024. While this reduction in BCD sounds like a welcome move hinting at prices of smartphones in India coming down, in reality, the market doesn't expect much of a change.
With thin margins, increasing prices of chipsets, a fluctuating Rupee and intense competition in mid to premium smartphone segments, the 5% reduction in BCD may not be enough to pass on the benefits to buyers.
Things would be usual for market leaders like Samsung and buyers shouldn't expect any major price cut on Samsung smartphones apart from regular offers as the company makes almost all devices in India.
Echoing similar sentiments, Abhilash Kumar, Industry Analyst at TechInsights said, “I believe the sub ₹10,000 segment is going to be exciting as Qualcomm, Mediatek and Unisoc are launching affordable 5G chipset. So, people in the ₹10000 to 13000 price segment might switch to sub ₹10,000 if 5G devices are available.
It might have a little impact in the mid-segment but I believe it would be a minimal one if any. Don't expect much price cut in any other segment right now.
However, the card offers and financial tie ups of pure player platforms like Flipkart and Amazon along with the festive sales may bring the price down in H2 2024.”
BCD reduction of 5% doesn't impact smartphone brands in a big way
As the margins are thin and duty reduction is nominal, a lot depends on whether smartphone brands would want to pass the benefit to buyers. “The reduction of BCD (Basic customs duties) on smartphones, chargers and PCBA will not have any major impact on the prices of smartphones.
We may expect a price cut of 1-2% on an average from this move, however, this depends on OEMs if they want to pass this to the end consumer. In the lower price segments, we may not see this as in these price segments, the margins are very
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