Tech companies blame price rises on Brexit vote
US computer-maker Dell and the Chinese smartphone company OnePlus are both raising their prices in the UK and saying the move is the result of the nation’s vote to leave the EU.
Another company, used by several camera equipment-makers to bring their goods to the UK, has also revealed it will soon follow suit.
Intro 2020 said it had been “punched in the stomach very hard” by sterling’s drop after the Brexit referendum.Read more ↓
Experts predict further price rises.
The pound hit a fresh 31-year low against the dollar earlier on Wednesday – it has dropped more than 12% since the eve of the Brexit referendum result.
Falls against some Asian currencies have been even larger.
Dell declined to give examples of specific product price changes, but the Register reported that the company had already implemented a blanket 10% increase in the costs it charged UK retailers.
The PC-maker did, however, tell the BBC it had delayed the move as long as possible.
“In line with the rest of the industry, our component costs are priced in US dollars, and unfortunately, the recent strengthening of the US dollar versus sterling and other currencies in the EMEA [Europe, Middle East and Africa] region, following the UK’s decision to leave the European Union, will have a direct impact on the price we sell to our UK customers and partners,” a spokeswoman said.
“We understand that this is an uncertain time for many British businesses, and we will continue to work closely with our customers and partners to provide great value products and services.”
OnePlus said it would sell its latest handset, the OnePlus 3, for £329 from 11 July in order to protect its “extremely thin margins”.
That marks a 6.5% rise on its current price of £309.
“While we’ve held off action for as long as we can, the sharp drop witnessed in the currency markets following the Brexit decision has forced us to re-evaluate the OnePlus 3’s pricing in the UK,” the company said on its website.
“Accessories will not be affected.”
Intro 2020 plans to raise its prices by 10-12%.
The company is the official UK importer for several camera-related products including:
- Tamron, Tokina and Samyang’s lenses
- Hoya and Kenko’s filters
- Velbon’s tripods
- Sunpak’s flashguns
- Tamrac’s gadget bags
“For virtually everything we handle, there will be price increases from 1 August,” the company’s general manager, Jim Mackay, told the BBC.
“The currency situation is precarious for us at the moment – my feeling is that it’s going to be six to nine months before we get some stabilisation.
“It’s painful. We expect our turnover will fall as a result.”
The UK division of lens-maker Sigma has also indicated it will soon act likewise. All its products are made in Aizu, Japan.
“We build in a small buffer, which prevents the necessity of constantly changing our prices with every minor fluctuation of exchange rate, but the dramatic fall in the value of sterling as a result of [the] vote to leave the EU is far too great to be absorbed in this way,” said Graham Armitage, general manager of Sigma Imaging UK.
“Our customers, who are predominantly High Street retailers, are buying more [stock].
“Whether that is to be in a position to maintain current street prices for longer or to increase their profit is anybody’s guess.”
The retail consultancy Verdict believes further tech price rises will follow.
“These will come sooner rather than later for those who have not hedged currency far in advance or for whom there is little flexibility in operational costs to mitigate currency fluctuations,” said Andrew Hall.
“Retailers cannot be fully expected to absorb the costs incurred by currency volatility in the wake of Brexit.
“As such, price rises are likely to impact a number of products.
“For some markets, such as clothing and footwear, this will see a return to inflation after a period of deflation.”
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