10/29/2008 11:08:00 AM
Low pound fires interest from box breakers
Sharp falls in the value of the pound in the last two months have triggered new interest from box breakers who will make better margins exporting phones in the overseas markets.
Figures suggest that the pound has fallen by almost 25% against the dollar over the past year. Because UK currency is getting cheaper for overseas buyers, any phones bought in the UK and taken abroad will represent better value for companies buying in dollars.
Sterling was being traded for $2.11 at its peak in November 2007 and has gradually started to fall, with faster decline in the last fortnight. One British pound bought $1.56 last week, a figure that continues to fall. There are clear expectations in the city that it would drop below the magic $1.50 mark before the end of the year.
One industry source said: ‘You are now looking at a very attractive market for exporters – box breakers are rubbing their hands.
‘Last year when you had two dollars to the pound, an overseas buyer was buying a phone worth £50 here for $100. Now they can buy a phone worth £65 for the same amount of money.’
On the flip side, the weakening pound has been bad news for importers of grey market handsets. Many handset distributors tend to look to the international markets for phones if they experience supply problems, or find that prices abroad are lower.
UK divisions at Samsung and Nokia will be buoyed by the lessening appeal of importing phones.