The United Kingdom’s recent Brexit vote has far more ramifications than simply leaving the European Union. OnePlus just announced that its latest flagship smartphone the OnePlus 3 will likely increase in price in the United Kingdom as a result.
OnePlus remarked that its margins in the United Kingdom have always been thin and its expenses are mostly in USD. The company, however, is not concerned about the phone selling because it is confident that the “OnePlus 3 is one of the best phones out there, and it’s our most successful product ever”.
OnePlus is worried, however, about the recent drops in the value of the GBP (Great Britain Pound). The company has only had to increase prices once, when the Euro hit a nine-year low against the dollar at the beginning of 2015. OnePlus noted, “Currency fluctuations are not your fault, nor our fault; but if we sell at a loss, the simple fact is that there won’t be a OnePlus in the future.”
The United Kingdom was a member of a free trade area in Europe before it joined what was then known as the common market. In a free trade area countries can trade with each other without paying tariffs. The 1992 European Single Market allowed the free movement of goods, services, money and people within the European Union, as if it was a single country. The United Kingdom was part of this Single Market until the Brexit vote. Please read this article for more information about the effects of Brexit.
Image from speedpropertybuyer.co.uk
Many other companies could follow OnePlus’ example. On Friday, the pound fell to £1.315, its lowest since before the world's major economies signed a deal to weaken the dollar in September 1985. While the pound is still technically worth more than the United States dollar, this may not last for long. A falling pound means higher prices in the United Kingdom.