GST Enabling Lenovo to cut prices of smartphones in offline market

New Delhi: Tech Giant Lenovo (LNVGY) and its owned Motorola (MOT) have decided to sell the handsets at a revised bargainous price through the brick and mortar channel following the implementation of the Goods and Services Tax (GST). Lenovo marketing business group executive director, Sudhin Mathur mentioned that the cut in the prices of the handsets to be sold through the medium of retail stores is still being evaluated.

However, this only pertains to the older handsets in the market. The prices for the newer devices that have been introduced in the market are already adjusted with the factor of the new tax regime.

The quantum of the haircut in the handset prices is still being evaluated but this is mostly inspired by the price cut by players like Apple (AAPL) and Asus, who reduced the price of their smartphones post the roll out of GST regime.

The mobile phones now are being taxed at 12% GST as compared to an earlier band of 8%-18% tax levied depending upon the states. India is one of the fastest growing markets in the avenue of smartphones with the ratio 3 out of 10 people carrying a smartphone today.

Motorola has recently launched two 4G enabled smartphones Moto E4 and Moto E4 Plus in post-GST regime. Moto E4 Priced is Rs. 8999(offline) which runs on Andriod 7.1.1 Nougat and comes with 2GB RAM and 16GB internal storage with microSD card for expandable memory upto 128 GB. It comes with 5 inches HD Full Lamination Display, 1.3 Quad-Core Processor, 8MP rear and 5MP front camera and 2800mAh removable battery.

On the other hand, Moto E4 Plus Price is Rs. 9999 (Flipkart) which runs on Andriod 7.1.1. Nougat and comes with 3GB RAM, 32GB internal storage with microSD card for expandable memory upto 128GB. It comes with 5.5 inches HD display, 13MP rear and front camera and 5000mAh battery.

Players like Lenovo (LNVGY) and its owned Motorola (MOT) are aggressively cutting short the market share of players such as Samsung (SSNLF) and Micromax who hold a significant market share.

See also: GST rates to sway between AC and Non-AC Restaurants