Coronavirus could shake up mobile phone prices

The outbreak of the Chinese novel coronavirus could increase mobile phone prices in Bangladesh due to a disruption in supply, said mobile phone importers and distributors.

Fear of the deadly virus spreading has badly affected business between both countries since the beginning of this year.

As a result, mobile handset prices could go up if the virus is not reigned in within the next one month, stakeholders said.

Bangladesh currently has a demand for 2.5 million mobile phones every month, according to market data.

Local manufacturers can produce only 3-4 lakh phones, which is 8 percent of the country's total demand. Another 40 percent is met by locally assembled phones, while the rest is fulfilled through imports.

At present, Samsung phones have the highest demand in Bangladesh. Fair Electronics Ltd, a concern of Fair Group, is the manufacturer and distributor of Samsung in Bangladesh.

But phones of other trending brands like Huawei, Oppo, Xiaomi, Vivo and Lenovo are mostly manufactured in China.

Although some local firms manufacture phones after importing raw material from China, the production number is not significant enough to meet the full demand.

Mobile phone importers and distributors are afraid of a price hike in the next one month due to the low supply.

Mohammad Nizam Uddin Jitu, chairman of Bangladesh Mobile Phone Business Association (BMBA), said that business activities between Bangladesh and China have drastically fallen since the outbreak.

"We will have no option but to raise prices if the situation does not improve soon," he added.

Nizam further said they had learnt of grey market sellers already trying to benefit from the crisis by charging higher prices. 

Like importers, local manufacturers are also deeply concerned about the impact of coronavirus. 

Walton, Symphony and Winstar are the top local manufacturers who produce mobile phones after importing parts from China.

They also foresee a crisis coming ahead.

SB Tel Enterprises Limited is a subsidiary of Edison group that manufactures Symphony smartphones in Bangladesh after importing parts from China.

The company assumes if the coronavirus outbreak continues for the next month, then they have to increase the prices of their mobile phone.

"Usually, importers and local manufacturers reserve raw material in their factory for 15 days to two months, as per their capacities. But to avoid the upcoming crisis, most of the companies have already begun holding onto their raw material stock," said MA Hanif, assistant director of Edison Group.

He added that this might also play a role in hiking phone prices.

Although prices have not been raised yet, phone importers did discuss the issue during a recent association meeting.

"We have to hike the price of products – including phones and raw material – by 10 percent if the situation does not improve," said MA Hanif.

Chinese multinational technology company Huawei, besides selling telecommunications equipment and electronics, also offers some fascinating smartphones.

It too is afraid of a disruption in the upcoming days, but has not faced any problems yet, said an official at Huawei Bangladesh. 

Though cell phone prices have not increased yet, the price of other digital accessories – which are mostly Chinese – has increased.

Bangladesh Phone Consumers Association President Mohiuddin Ahmed claimed that the price of USB drives, memory cards, headphones, mobile displays, monitors and RAMs have increased manifold.

"Some businessmen have increased the prices of these products by up to 20-50 percent as most of them are imported from China," he added.