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Mobile Phone Prices In China Could Increase Next Year, Thanks To Dollar Fluctuations

by Jed John 6

One of the major shocker the financial sector got this year was the fluctuation in the price of the Chinese Yuan to the US Dollar. Both currencies had consistently traded at fairly stable price but the Chinese economy seems to have experienced some turbulence occasioned by mounting debt which sent the Renminbi (RMB) crashing in the face of the US Dollar. China’s Foreign Exchange Trade Centre has already warned that the Yuan will soon exchange for 7 yuan to a dollar as it stands around 6.9435 yuan to 1 US dollar presently.

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Accordingly, a rise in the exchange rate could lead to increase in prices of the parts used in smartphones and even though the effect won’t be hard on those who ship overseas, the prospect doesn’t look too good in the overall. While the phones are manufactured in China, parts such as the chip, camera, screen, memory  etc are imported from other countries and paid for in US dollars. A higher exchange rate means the manufacturers pay more for the parts than before. This has led the major phone manufacturers to warn that there might be an increase in phone prices next year.

Read More: Morgan Stanley: China’s Smartphone Market Could Be Flooded With Excess Shipments

China’s domestic manufacturers have been making efforts to shift the focus to high-end, lucrative market like the US and European market as well as India. This strategy can be seen as the only way out of this looming financial crisis.

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  • Karoon

    > parts such as the chip, camera, screen, memory etc are imported from other countries and paid for in US dollars
    That’s total BS, everybody knows that most foreign manufacturers make their parts in China too…

    • Foxy

      Example
      Chip. Qualcomm. USA
      Camera. Sony. Japan
      Screen LG. Korea
      Memory Samsung. Korea
      Assembly. Foxconn. Taiwan
      We can go further if you want.

      • Karoon

        Sure, go further, but you missed the point: all these parts are manufactured in China or Taiwan if we talk about Foxconn, regardless of where the company comes from, well, except maybe for Samsung who also make their phones and parts in Vietnam

        • Wolvie

          Yes you are right, all those vendors have their own factories in china because of cheaper cost there compare to operate at their own country.

          So yeah in a way it is totally BS to increase the price. But you know this kind of lame excuse always can be use to increase prices so they can get more profit LOL.

          • Karoon

            My thoughts exactly

        • Foxy

          No, you (and your sibling down) are missing the big point that all the transactions are made in USD, if you think that Xiaomi buys cameras from Sony (for example) paying in the currency of the plant where parts are made, well you’re soooo naive (at least).

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