The Hindu Business Line : Branded PC price hike on the cards

Rising trend
Industry players said that the hikes could be from 2-5 per cent.
Assembled segment expected to hold the price lines at current levels in the near term

Bangalore , June 25

Personal computers are set to become dearer in the near future. Driven by rising input costs and an appreciating dollar, manufacturers, especially multinational vendors, are gearing up to hike prices for the second time in three months. PC prices had shot up in March by 5-6 per cent after the Government announced a new excise duty structure.

However, players in the assembled segment better known as "white box vendors" are expected to hold the price lines at current levels in the near term. These vendors are of the opinion that there are no sufficient triggers to hike prices.

Factors such as a depreciating rupee against dollar coupled with the recent rally in global metal prices and increasing freight costs are compelling the MNC vendors to hike their prices. Industry players said that the hikes could be from 2-5 per cent.

But these MNC vendors are waiting for competitors to take the lead in announcing a price hike. "There is a pressure to increase prices and we are waiting as to who will blink first," said an official of a leading hardware MNC in Bangalore.

Mr R. Manikandan, General Manager of LG Electronics India, said that the firm plans to effect 2-3 per cent increase in prices across its product line as soon as possible. LG recently increased the prices of its monitors by about two per cent.

The cost of components containing metals such as copper and zinc, among others, has increased in the recent past mainly driven by the rally in global metal prices. Along with this the freight costs have also gone up, vendors said.

"More than the rising input costs, it is the sharp currency movement that is proving costly for us," said Mr Nitin Chaudhary, Country Manager (Commercial Desktops), Hewlett-Packard India.

The dollar has gone up against rupee by more than five per cent in the past six months.

HP imports bulk of the components and prices are negotiated on long-term basis.

"Our component suppliers have not sought a price hike," Mr Chaudhary said, adding that the company has already corrected the prices recently for select categories by 2-4 per cent.

Further, HP does not have any immediate plans for an across-the-board price hike. "However, if the dollar continues to head northwards, we may be compelled to do so."

But Mr Raj Saraf, Chairman and Managing Director of Zenith Computers Ltd, said that there was no impact on component prices.

He added that PC prices would see a fall as chipmaker Intel is expected to announce a new pricing strategy for its processors, effective from July 23.

Speculation is rife that Intel might announce a price cut for its Celeron D, Pentium 4, and Pentium D, processors in July, when it expects to roll out the high-end Core 2 Duo processors. An Intel India spokesperson said that the company has not made any announcements in this regard.

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