Lenovo, the popular tech major, this week claimed that it will cut costs of smartphones in the coming days traded via offline retail channels, following the implementation of GST. Motorola smartphones traded via brick-and-mortar channels too will witness the price cutting soon. “We will slash the costs of smartphones traded via retail channels. We are still calculating the amount of cost cut. This might come into effect quickly,” Sudhin Mathur, Executive Director, Lenovo MBG India, told the media in a statement.
He further added that the amendment comes due to the launch of new GST rule. On the other hand, costs of the latest gadgets being rolled out in the market gets involved unnecessarily in the effect of the new tax rule, Mathur told the media in a statement. Players such as Asus and Apple have already slashed costs of their handsets post July 1 when the GST rule come into effect. Under GST, mobile smartphones are being charged at 12% than to a previous range of 8–18% relying on the states.
The government had also rolled out a 10% Basic Customs Duty (BCD) on mobile smartphones and certain components, in a an attempt to market domestic production. Lenovo (paired with Motorola) produce their smartphones in India via contract production. India is one of the quickest growing handset markets worldwide. Players such as Micromax, Samsung, and Lava have had an important grasp of the market, Chinese players such as Vivo, Lenovo, and Oppo are assertively consuming into their market share. The rivalry among these contenders is violent, particularly in the mid-range (Rs 12,000 to Rs 20,000) and reasonably priced (Rs 12,000 and below) smartphones.
“More than 52 Million gadgets were traded in the past 4 quarters in the $100–200 segment, making it the biggest category. Fascinatingly, offline and online account for same proportion of this category,” he claimed. Motorola has recently rolled out the ‘C’ series in the $100–200 price segment. The ‘E’ series also falls in the same category. “This category is witnessing development, boosted by need from first-time users as well as individuals upgrading their handset to a better gadget,” he said.