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![TMCNet: Short-term impact on smartphone sales to cost more but dealers see only short-term impact [Kochi] [Times of India]](http://images.tmcnet.com/siteart/invisible.gif)
Short-term impact on smartphone sales to cost more but dealers see only short-term impact [Kochi] [Times of India]
(Times of India Via Acquire Media NewsEdge) KOCHI: The Budget proposal to raise the excise duty on mobile handsets priced above Rs 2,000 to six per cent is expected to have a short-term impact on the cellphone market in the state, which has a tele-density of 112% as per the latest reports. The proposed hike in duty will increase prices of handsets in a range of Rs 120 to Rs 3,000 (for a device costing Rs 50,000). Mobile phones at present attract 1% excise duty.
Mobile phone dealers said over 60% of cellphones sold in the state are priced above Rs 2,000 and the market has been stagnated since September last year. They expressed disappointment over the move, saying that it would further weaken the market in the near future. as companies are most likely to raise prices of all products falling in the category.
They also said the move was not likely to result in a spurt in sales unlike in the case of vehicles.
"It will actually lead to a confusion in the market; there will also be no uniformity in prices as dealers will be charging different prices," said Anwar, owner of Nano Mobiles, Kochi. He said some dealers were also likely to hike prices in the coming days to gather extra bucks.
However, they exuded confidence that the cellphone manufacturers would bring down the prices after a few months. "Besides reducing prices, they are also likely to provide discounts on products. The companies are also not likely to pass the entire burden to buyers. Though companies had hiked the prices when excise duty was increased last time, they reduced them after a few months," a dealer in Penta Menaka said.
Major dealers, however, said the hike in excise duty was not likely to affect the sale of high-end products as buyers of such products would be prepared to spend more. They have been selling three to five smartphones on an average daily.
There were also views that mobile phones would be cheaper in the state when compared to states like Tamil Nadu owing to higher taxes and the move could encourage the grey market.
(c) 2013 Bennett, Coleman & Company Limited
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