Brexit might be a change happening many miles away from you, but the truth of the matter is, it is having varying degrees of effect on different parts of the global economy. Britain being one of the major economic powerhouses of the world, its withdrawal from the European Union was bound to send shockwaves that will reach all corners of the world; albeit some areas will be badly hit than others.
Even without the European political affairs, the smartphone industry already had a thin profit margin and sometimes completely non-existent. Now, add Brexit into the equation, things seem all the more uncertain. With the Pound and the European stock market currently being volatile, smartphone makers are particularly on shaky grounds, and for sure, relatively small (new) companies will not afford to sell at a loss as Britain regains its economic footing.
LG and Samsung Concerns
The smartphone market is already anticipating price hikes as they adjust to the currency fluctuations. Shortly after Brexit decision was clear and final. Leading OEMs in like LG and Samsung spoke separately to the media in South Korea airing their concerns on the decision of Britain to pull out of the EU.
LG told The Korea Times, they are concerned about “a dent in investment inflows.” On the other hand, Samsung said through an internal rep they are closely monitoring Brexit and see how it will affect their business.
China’s OnePlus announced possible price hikes
The Chinese-based OnePlus did not mince words and was straightforward and blunt about it. David Sanmartin, the OnePlus head of Marketing in Europe in a blog post warned consumers to expect a OnePlus 3 price hike in the UK.
“Currency fluctuations are not your fault, nor our fault, but if we sell at a loss, the simple fact is that there won’t be a OnePlus in the future,” wrote Sanmartin.
He, however, guaranteed consumers that if the price hike were to come, they will be forewarned and not come “out of the blue.” Currently, the OnePlus 3 its flagship phone that has received good reviews so far retails for £309 in England. A bit higher when compared to Hong Kong and the United States where it retails for HK$3,098 and US$399 respectively, with China having the best prices of 2,499 Yuan).
For consumers inside the UK and EU countries, now rather than later, might be the best time to buy that smartphone, tablet, or computer. Prices might hike in the coming months, as the currencies try to stabilize.
Apple felt the heat sooner than others
For people outside Britain and the EU, the weakening of the Pound or Euro might seem like a good thing on the surface. However, for big tech companies like Apple with vested interest in the global market including the Britain and EU countries. That might spell trouble. For instance, in the last quarter, Apple recorded over US$2 billion loss in profit due to weakening the foreign currency.
Related: Effects of Brexit on Travel, Study, Visa, Jobs, and Expats
According to USA Today, shortly after Brexit, Apple experienced a 3% drop in its stocks. If giant smartphone maker like Apple is already feeling the shockwave of Brexit, how about other smaller companies within and outside the smartphone industry that have vested interested in the global market?