After touching new highs due to the pandemic, prices of electronic components used in the manufacturing of television, mobile phones, computers, along with the shipping costs have cooled down to pre-covid levels, The Economic Times (ET) reported.
Given the drop in component prices, it is likely that the companies will pass on the benefits to the consumers. Industry experts believe that price reduction may lead to a revival in the demand for these products, which has been unexciting for the last year.
The decline in input costs is also expected to help manufacturers increase their profit margins
Besides component costs, freight charges have also come down. For instance, the cost of containers shipped from China has plunged to $850-1000 from the peak of $8000 during the height of the Covid-19 pandemic.
Further sweetening the deal are the prices of semiconductor chips, prices of which have crashed to an all-time low, now at one-tenth of the Covid period, the ET report said. Moreover, the experts said the prices of electronic components are also down by 60-80 per cent.
Talking about the subject, Managing Director of Dixon Technologies India, Atul Lall, told ET, "Prices of components for all electronic products and freight have crashed to pre-Covid and in some cases even slightly lower due to a global fall in demand and recession in some countries."
The report added that companies like Dixon Technologies, Havells and Blue Star had said in their last quarter's earnings calls that their profit margins are likely to increase this year.
A drop in the prices of open cells globally has been reflected in the average selling prices of Dixon's products which have come down to Rs 11,500 in 2022-23 from Rs 16,400 in 2021-22, ET reported. Open cell is the most important and also the most expensive component used in making televisions.