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PCs, LCD, plasma TV to cost more

June 03, 2008 09:09 IST
Electronics, IT goods makers HCL Infosystems, HP, LG Electronics and Zenith are raising prices of personal computers (laptops and desktops), LCDs and plasma TVs, and IT peripherals for the first time this year by as much as 13 per cent to offset higher cost of inputs triggered by a falling rupee. The move may nudge inflation further crimping consumer spending.

LG Electronics has already announced a price hike for monitors and optical storage devices (OSDs). R Manikandan, business group head (monitors and OSDs), LG Electronics, explained, "It has become imperative for us to consider a price hike due to a rise in exchange rate – an approximately 7 per cent rise in the last one month."

Samsung, too, indicated it was mulling a price hike with no firm decision taken as of now. Computer makers import almost 90 per cent of inputs used in the manufacture of PCs. For LCD monitors, the gravity of the situation is compounded by the fact that customs duty is based on the maximum retail price (MRP). Globally, LCD panel prices have risen by around 5 per cent.

For LG, the targeted price increase is around 7-10 per cent. However, it will be increased in a phased manner starting with a 3 per cent hike with immediate effect.

An LG spokesperson confirmed that a price hike is expected across its LCD and plasma TV range, though LG handhelds, which also use LCD panels, would escape the burden.

"We will be raising the prices of LCD and plasma TVs by 2-5 per cent, but mobile phones will not see any increase in prices," confirmed the LG spokesperson.

LG desktops bundled with LCD monitors, with a starting price of around Rs 13,000, may see a price rise of 6-8

per cent.

"Laptops too will see an escalation in prices," said the company spokesperson. LG laptops start at around Rs 24,000.

Other manufacturers may follow suit. "We are looking at increasing laptop prices by around 13 per cent. We will be increasing prices with immediate effect. Over the next few days, the hike will be extended to the entire notebook range," says Rajiev Grover, director (consumer products), personal systems group, HP India.

George Paul, executive vice-president (marketing), HCL Infosystems, concurs, "We will be announcing a hike in prices across all products over the next few weeks. The hike, depending on a number of factors, will vary across producers but it is primarily due to the impact of the dollar."

And so does Devita Saraf, executive director, Zenith, who said she could not indicate the exact quantum of the hike.

Vinnie Mehta, executive director, MAIT, admitted that a rising rupee implies that "some players might increase the prices of IT products.

But these hike tend to get neutralised over a period of time". Analysts note that a hike of 5-10 per cent is bound to impact sales of IT products.

Sales of laptops and desktops may take a bigger hit, especially in the small- and medium-enterprise (SME) and home market segments, which are price-sensitive.

Additional reporting Priyanka Joshi & Shivani Shinde

Kirtika Suneja in New Delhi/ Mumbai
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