“Some mobile phones have many functions these days - personal digital assistant, mobile telephony, a camera, GPS, radio, television. It would be more appropriate to refer to these as ‘apparatus with multiple functions, including mobile telephony’ as they are more than just ‘mobile phones’,” said the European Commission.
“European companies would face a further costly blow to their operations in the EU, at a time when many are struggling to maintain profitability, given the economic crisis," trade lobby EICTA, representing Samsung , Apple , TomTom , LG to name a few .
Even local manufacturers Nokia and Ericsson are against the taxes.
A spokesman for Nokia said: "There is a danger that this proposal would put the latest technology out of the reach of European consumers as it would simply push up the price of sophisticated mobile phones. This is in nobody's interest."
Gartner analyst Carolina Milanesi says "Replacement markets like Europe rely on new technology - if we are now adding tax to it this will make consumers think twice before upgrading,"
In the proposal, seen by Reuters, the Commission aims to allow duties to be imposed on handsets with the most advanced features, including high-quality cameras and full qwerty keyboards.
"While only a small number of sophisticated mobile phones in the industry would be affected today, due to rapid technological advances, the number ... would likely rise significantly in the coming months and years," the Nokia spokesman said.
While GPS chips are currently used mostly in top-end cellphones, Nokia and others are increasingly looking to use them in mass-market phones.
"We estimate the planned taxes would increase the average price of a navigation-enabled or TV-enabled mobile phone by between five euros and 40 euros in 2009," said Neil Mawston from Strategy Analytics.
"We currently forecast total mobile phone shipments to decline nine per cent in Western Europe during 2009 and the industry needs to offer lower, not higher, prices to consumers," he said.
The Commission's plan will be discussed next February within the Customs Code Committee, which can also decide on the matter.
Maria Assimakopoulou, spokeswoman for EU Tax Commissioner Laszlo Kovacs, said no decision was imminent as the Commission is only starting discussions with member states. "These discussions will not be concluded for at least another six months," Assimakopoulou told Reuters.
What it all means that the consumers will think twice before upgrading their phones to latest technologies . While the tax is on ‘Imported’ cell phones mainly effecting Samsung and Apple , Nokia and Ericsson could fear the same as retaliation in other countries what if Korea or the Asean block impose the same taxes while America well it’s an open economy .
Hopefully none of these effects the Pakistani market where the handsets are one of the most inexpensive in the world ;)
Reportingly
Farhan
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