12/17/2008 12:51:00 PM
Imported goods are hit by weak pound
Companies importing handsets are being battered by the continuing slump in value of the British Pound, particularly against the Euro.
Dealers and distributors admitted that the sharp drop is slicing into virtually everyone’s profits.
The pound’s value had fallen below $1.5 and €1.2, as Mobile went to press, representing the pound’s lowest ever value against the Euro.
Some high street currency exchangers and airport banks had even pushed the pound to parity with the Euro.
James Browning, 20:20’s managing director, said: ‘It affects everyone.Goods
from Asia have become much more expensive, as they tend to deal in US dollars. Companies that buy a lot of stock from Asia are being hit by the weak pound.’
Manufacturers are being implored to maintain UK pricing on handsets and not hike up prices for official distribution. The situation plays into the hands of official distributors who are the sole routes for devices at UK prices, but even they will be affected. Some manufacturers, such as LG, price their phones in Euros.
Those likely to be affected are grey market importers, major UK retailers and operators that buy phones from overseas.
One trader said his company turnover has been hit by as much as five times over the course of just half a year. He said his company had been bringing in £10,000 to £15,000 per month in the summer, compared with around £3,000 per month now. He said:
‘It’s crippling us. It’s not the financial situation that’s the problem, it’s the exchange rate.’
The only winners in the pound’s value drop are box breakers, who are profiting an extra 50% compared with 2007, when the pound was valued at $2. Prepay phones are being heavily targeted by box breakers, but it is also claimed that the BlackBerry Storm has been targeted by exporters drawn to high Vodafone subsidies on the device.
There is high demand in Europe for the BlackBerry Storm device, due to a
relative shortage of stock on the continent.