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Featured ‘Samsung actively considering setting up assembly plant in Pakistan’

Cookie Monster

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Apple does not manufacture mobile phones by itself. It orders Foxconn (and other Taiwanese and Chinese companies) to assemble the phones with components from many suppliers. Companies from various countries, including Vietnam or Pakistan, are doing the same. Apple is just the biggest customer of Foxconn.

Second point is that there are many component suppliers in China and they can manufacture nearly 100% quality components at relatively good price, from screw to screen to processor. And there are perhaps several hundred, if not thousand, of such components in one mobile phone

In the meantime, to be honest, Vietnamese suppliers cannot manufacture even a simple screw to be used in the phones, although we have the biggest assembly plant of Samsung outside Korea. Technically we can manufacture the screw (And any African country can do as well), but we cannot do it at a reasonable price (no technology (imported), no suitable metallurgy (imported), lack of skilled manpower (very high salary). Not to mention more sophisticated components like screen, processor, memory chip etc.

That is the difference between China and other countries, which are basically not related to the labor costs. And you can list other advantages like excellent infrastructure and logistics.
Yes I'm aware of the contract manufacturing that Foxconn(among others) does for Apple. I'm also aware of the ease of doing business in China(as opposed to other countries which also have cheap labor) mainly bcuz as u mentioned there's a whole ecosystem in place to do so. This is why countries like India and Vietnam haven't had as much success as they had hoped when trying to lure manufacturing away from China. The same applies to countries like Pakistan, Afghanistan, Bangladesh, Sri Lanka, and others that have cheap labor.

P.S. I don't mean to demean what u wrote...it is very informative and I thank you for it. It just so happens by chance that I have already read up enough on it prior to u posting it.
 
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CrazyZ

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Pakistan is one of the worlds top 10 consumers of smart phones. Those numbers will only increase as our population continues to increase. We should make it clear to top smart companies that if they wish to sell in Pakistan, they need to setup local assembly plants. But we should not stop their. Assembly labor shouldn't be a large cost (avg less then $6 for Samsung).

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When it comes to hand held held electronics, energy costs to make the components...Silicon chips, glass screens etc. Should be a very large component of the manufacturing cost. Shifting production of components closer to ME with its huge low cost energy supplies, makes more sense to me. The largest costs for the consumer is the is the name brand.
 

CrazyZ

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Apple does not manufacture mobile phones by itself. It orders Foxconn (and other Taiwanese and Chinese companies) to assemble the phones with components from many suppliers. Companies from various countries, including Vietnam or Pakistan, are doing the same. Apple is just the biggest customer of Foxconn.

Second point is that there are many component suppliers in China and they can manufacture nearly 100% quality components at relatively good price, from screw to screen to processor. And there are perhaps several hundred, if not thousand, of such components in one mobile phone

In the meantime, to be honest, Vietnamese suppliers cannot manufacture even a simple screw to be used in the phones, although we have the biggest assembly plant of Samsung outside Korea. Technically we can manufacture the screw (And any African country can do as well), but we cannot do it at a reasonable price (no technology (imported), no suitable metallurgy (imported), lack of skilled manpower (very high salary). Not to mention more sophisticated components like screen, processor, memory chip etc.

That is the difference between China and other countries, which are basically not related to the labor costs. And you can list other advantages like excellent infrastructure and logistics.
In order to manufacturer a smart phone, assembling nation would have to import 95% of the components (mostly from China, Korea, Japan, or Germany). Assembly costs is probably less then $10. To export $1 billion in smart phones, assembling nation would have to import $950 mill in components. The net isn't as lucrative as some assume.
 

Moon

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Update:


"Regarding Samsung’s operations in the country, Mr Dawood said that initially Samsung had refused to come to Pakistan. “However, later Samsung changed its earlier decision and agreed to come to Pakistan. A joint venture with a local partner is on,” he added. The adviser said he was optimistic about uptick in exports of mobile phones from the country."
 

v9s

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Lucky Motor Corporation (LMC), a subsidiary of Lucky Cement Limited, has entered into an agreement with Samsung Gulf Electronics Co., FZE (Samsung) for the production of Samsung-branded mobile devices in Pakistan, stated a notice sent to the country’s stock exchange on Friday.


“In pursuance of this transaction, LMC has also initiated the process of seeking necessary regulatory approvals to carry on the said business and, in this endeavor, has filed an application with the Pakistan Telecommunication Authority (PTA) for securing the license,” added the notice.
 

Paul2

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About time too, pakistan has a large workforce that can be trained for low cost. It has always amazed me how Tech companies like Samsung etc and even mainstream vehicle manufacturers have shied away from setting up shop in Pakistan. Audi group can capitalise on this, their mainstream affordable brands such as VW, Seat and Skoda can be manufactured in Pakistan (even assembly would be good value for investment).

The current mafia of Japanese brands needs to broken, maybe Samsung will usher in a new trend of investment from such firms and change the face of Pakistan. I can then purchase a car in Pakistan, cannot for the life of me think how Toyota,Suzuki etc have gotten away with it so far.

Its about time they should start using Mehrans as target practice down range. In all honesty its not even good enough for that.
Labour cost is a small minor part of electronics manufacturing. While $400-$500 a month is a very heft salary for a young person in Pakistan, it barely makes past a rounding error in the device price tag.

Tariffs are fully legitimate mean to force companies to setup shops locally. Even Americans with all of their WTO stonewalled Germans, and Japanese when it comes to things like cars manufacturing, oil, telecom.
 

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