Home / Technology / News /  Supply  chain  deficit set to raise  prices  of electronic products

NEW DELHI : Electronics manufacturers, including Chinese firms, such as Xiaomi, Realme, Tecnno and Oppo, have increased prices of affordable products, such as 4G smartphone, following crippling shortages in the supply chain.

Industry executives said prices of smartphones in India could go up by 100-1,000, while Xiaomi expects 3-6% increase in prices of smart TVs from 1 July. In a Twitter post, Mumbai-based Mahesh Telecom said Oppo has announced a price hike of 500-1,000 for Oppo A11, A15, A15s and A53s models. Realme’s site show the company has increased prices of its C11, C20, and C25s models by 200 to 500.

An industry executive, seeking anonymity, said the price correction will affect all affordable products, including 4G smartphones. Since 5G smartphones have a higher average selling price (ASP), the segment may remain unaffected.

“The bill of materials (BOM) cost of devices will increase, so this will be an industry norm," he said, adding that flagship phones from Apple and Samsung may not be affected.

“Since the last one year, we witnessed shortages across the supply chain. Due to massive demand-supply mismatch, the majority of components used in smartphones, Smart TVs and other electronic gadgets (chipsets, display panels, display driver, back panels, battery, etc.) have seen constant upward movement in prices," a spokesperson from Xiaomi said.

“This, coupled with an unprecedented increase in shipping charges, had an effect on almost all technology players, including us. While we ried to absorb the increasing costs, some of our products have witnessed a price hike," the spokesperson added.

According to Prachir Singh, senior research analyst, at Counterpoint Research, the price hike was expected for a while. “Component shortage hasn’t just been increasing for the India market, but globally as well," he said. “I think other brands will also follow, but the quantum (of price change) will differ across brands."

The global shortage in semiconductors since the covid-led lockdown was lifted last year, is expected to continue well into 2022.

“The scenario will be similar to what happened last year, when the government increased the GST (goods and services tax) on mobile phones," he added.

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