It is speculated that the highest point in inflation is yet to hit India. A new survey says that nearly two-thirds of the executives in India expect prices to flare up in the next six months. So the going is yet to get tougher.

Among the products primarily responsible for the current inflation are food products of different kinds, including cereals, intermediates like metals and the universal intermediate, oil. This has not left out the IT products which are facing hike in various categories due to the overall impact of inflation. The dealers may find the market sluggish due to the hike in the prices of IT products.

Consumers may find the going tough in the coming months as there is an expectation of nearly 10% hike in various range of IT products. Ashok Lalwani, Propreitor of AB Infotech, Bangalore feels that the harware products will be the most affected by the price hike. He adds on, “ The main reason for the price hike is the rise on the strength of the dollar against the pound. There is no way other than to increase the price of IT products. There has been 2-3% rise in the IT market.”

This might cause a lull in the sale of hi-end LCD and plasma televisions, printers and notebooks. The value conscious consumer might pull out of the purchases.

No one can hold the prices when dollar shoot up drastically. Still it will give negative effect in slow market. Srinivasan Sundera Raj, COO of Netsoft Technologies, Mysore says, “In response to weakening of the pound against dollar and the rising costs we are forced to increase the price of IT products. The rise in dollar strength has resulted in the rising of fuel prices which has ultimately led to the hike in the IT market. There has been about 3% rise in the prices of IT products. According to my opinion price hike will affect each and every product in the IT market. The prices are supposed to rise again in the future.”

The IT Market is going in slow motion today and price rise will again play a roll in market which is going slow.

The rising dollar is not the sole reason for IT price hikes. They are also passing on the cost of rising fuel prices to customers. They try to recover the costs involved in annual freight costs for shipping the products it distributes to resellers. Sridhar K , Partner, Gem Systems, Hospet says, “ The IT market is facing higher costs due to the increase on the strength of dollar. The increase is more than 3%. It is expected to rise again. I think all products will be affected alike. But I am sure that the price hike will not keep our customers away. Schools, colleges, offices –everywhere computers are of great demand today. So to an extent the price hike is not going to affect the dealers.”

The price erosion in computer monitors has come to an end. The pricing is expected to trend upward for 14-inch, 15-inch and 17-inch which could cause an impact on the customers.

Consumer aspriations have picked up sharply in semi-urban markets and smaller towns, where corporate interest in terms of investments in distribution and marketing to the rural markets have substantially picked up.

“And manufacturers have been supporting dealers by bearing a part of the cost so that customers don’t bear the brunt of any increase in cost,” Haier India CEO Pranay Dhabia said.

Value erosion over the past two years, makes a further price correction economically unviable according to industry players. Besides, even with input prices going up over the past couple of months, manufacturers have maintained prices at competitive levels.

Industry speculates that higher prices will upset an otherwise upbeat momentum in purchases. Affordable products and a general feel good factor are helping shore up volumes since the last one year with the semi-urban and rural market throwing up bigger volumes.

The IT dealers will have to come up with greater innovations and try to cash in on the consumer aspirations for IT products. As long as the need for products is felt, the market will stay strong. Dilip Kumar Propreitor, Computer Shoppe, Mysore says, “The price hike in the IT market has affected the laptops and the branded computers most. I think the price rise will affect the dealers as well as the consumers. But I am sure as IT products have become necessity products in today’s world people wont stay away even if the prices go high.” The dealers will have to come up with promotions to cash in on the increasing demand for IT products in all sectors.