The low value of the pound relative to the dollar has started to affect the cost of smartphones in the United Kingdom. OnePlus has announced that the OnePlus 3 will increase in price from £309 to £329, due to changes in exchange rate.
Since the UK voted to leave the European Union in a referendum on 23 June, the pound has fallen sharply against world currencies. Hopes of a quick rebound have so far proven to be misplaced, as today the pound fell to a 31-year low against the dollar, as well as recording its lowest level against the Euro since 2013.
Supporters of Brexit – the term given to the UK’s departure from the EU – had hoped that the pound would stage a quick recovery after the initial turbulence.
But the pound is showing no signs of rallying and there is still large-scale uncertainty surrounding the future of the UK economy.
Last week OnePlus admitted that the fall in value of the pound on the world’s currency markets could affect the prices it charges UK consumers.
“The worrying downward trend of the GBP may make it difficult to maintain our current pricing structure in the UK,” a OnePlus spokesperson commented.
“Our expenses are mainly in USD. This being the case, sudden drops such as the one that the pound has recently experienced could have a direct impact on our prices.”
The company held off taking any action initially, instead waiting to see if the pound staged a recovery. As there was no bounce back, today OnePlus announced that it would be increasing its pricing for customers in the UK.
“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 at a time of significant demand,” a spokesperson stated.
OnePlus has said that minimal margins on the OnePlus 3 meant that it had to act.
“Given the effects of the unstable markets on our extremely thin margins, we’re reluctantly going to have make some small changes to our pricing structure for the device,” the company representative continued.
The direct-to-consumer business model employed by OnePlus has meant that currency instability has created pressures on its retail pricing, sooner than other manufacturers which utilise more traditional sales channels.
However, the ‘thin margins’ cited by OnePlus are common with smartphone sales throughout the industry.
For smartphones which already have significant stock levels within the UK, or in the case of existing shipments, the value of the pound is unlikely to have much direct influence on prices, in the short term.
If the value of the pound remains low in the coming weeks and months, however, then UK consumers are highly like to see a notable increase in the cost of smartphones, as well as other imported goods.
In addition, the low pound could also have an indirect effect on prices, as businesses face higher costs for imported goods and services that they use in day-to-day operations.