Why the depreciating rupee is bad news for India's smartphone industry
Chinese smartphone maker Xiaomi, known for its light-on-the-pocket but heavy-on-specs phones, has made quite a name for itself in the country. On the back of this strategy, the company has enjoyed unrivaled success in the Indian market. Only today (September 5), it announced three more such phones that promise to be great value for money.
Announced under the Redmi 6 line-up, the three phones – Xiaomi Redmi 6, 6A and 6 Pro – which start at Rs 5,999 and go up to Rs 12,999, offer new options to buyers in the entry-level and budget segment.
However, as it appears, the tumbling value of the rupee could seriously affect Xiaomi's ability to keep coming out with more such devices.
In a first for Xiaomi, the Chinese smartphone maker announced at the launch event that the current pricing for the devices is only introductory, and as such, is only valid for purchases made during the first two months-post the launch. Though much more wasn’t said on the matter, company representatives did hint that the prices of the devices would most likely be increased after the end of this period.
Why, you ask?
Well, the answer is in the poor showing of the rupee.
In an unusual move, Xiaomi’s launch presentation included a slide about the depreciating rupee, and how it could impact the pricing of Xiaomi phones in the coming days. Raghu Reddy, the company’s head for online sales, even went on allude to how the company could take a call on increasing the prices of their phones in the coming months — if the rupee's value keeps sliding down the barrel.
With the lion’s share of the market, Xiaomi taking any such decision would greatly impact the overall health of the market and directly affect hundreds of millions of smartphone buyers in the country.
However, the more worrying thing here is to understand that if a manufacturer like Xiaomi – a company that makes all its phones in India and as such, is shielded to an extent by the ups and downs of the rupee – is mulling such an extreme step, then we are most likely looking at a situation where smartphone prices could go up across the board in the market. And that is even worse news for the average Indian smartphone buyer.
As for the Indian smartphone market – the fastest growing one in the world – any such move would result in a decline in smartphone sales, and as such, the health and growth of the market.