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Smartphone manufacturers in Pakistan

ghazi52

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Samsung starts producing mobile phones in Pakistan

Imran Ayub
December 1, 2021


The logo of Samsung Electronics is seen at its office building in Seoul, South Korea. — Reuters/File


The logo of Samsung Electronics is seen at its office building in Seoul, South Korea. — Reuters


KARACHI: One of the world’s largest manufacturers of mobile phones, Samsung, has finally started production in Pakistan, lifting hopes of the authorities and the industry that this would cut down the import bill of the country in the months to come.

The development came to light on Tuesday at a meeting of the company’s top managers with the Senators who visited the production site in line with the plan to receive a briefing on the growing new sector and challenges ahead for the cellphones manufacturing industry in Pakistan.

“We were informed that Samsung has formally started its production,” Faisal Subzwari, chairman of the Senate’s Standing Committee on Industries and Production, told Dawn.

He headed a delegation of members of the Senate panel which visited Samsung’s production unit and an auto manufacturing plant, and held a meeting with the management of Export Processing Zone.
The company aims to manufacture around 3m handsets every year
“It’s really good to know that the company has started production within a short span of four months,” Mr Subzwari said. “We visited the production facility which was designed on modern lines and obviously the local manpower, support of local industry and conducive environment provided by the government led to such achievement. But still I believe that we need to move forward from just growing in the assembling area to localisation of the industry.”

The country has witnessed robust growth in local production of cellular phones. During the first 10 months of this year, the Pakistan Telecommunication Authority (PTA) data says, the production of mobile phones by local manufacturing plants has almost doubled to 18.87 million against the import of mobile phones which stood at 45m.

However, despite the increase in local production of mobile phones, the import remained on a higher side. The PTA data says that mobile phones worth $644.673m were imported during the first four months (July-October) of 2021 compared to $557.961m during the same period of last year, registering a growth of 15.54 per cent.

The industry believes that it may take time to achieve the desired results but with the fresh start in an absolutely new industrial avenue, things have finally started moving in the right direction.

“With production of around 250,000 to 300,000, we aim to produce around 3m cellphones every year,” Mohammad Ali Tabba, chief of the Lucky Group which partners with Samsung to produce cellphones in Pakistan, told Dawn. “The whole production line is manual with no robotic assistance. So you can imagine how much workforce is required offering employment in this absolutely new area of engineering in Pakistan.”

He agreed that the country needed to move towards localisation from its current status of assembling industry and believed it was more the role of the industrial sector than the government to go for modification and compatibility.

“It’s not only the local production of cellphones but also a host of opportunities which it brings. From employment to investment and from export opportunities to local capacity building, it carries immense potential,” said Mr Tabba.

Published in Dawn, December 1st, 2021
 

ghazi52

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Smartphone policy: It’s working!

BR Research
03 Dec 2021






The growing import bill is washing away economic stabilization. The bill stood at $7.5 billion plus in Nov-21. Economic managers are running pole to post to find out items to curb the bill. CBU car imports have been banned but while the decision may be reasonable, there are not much savings that can be extracted. Another area that


For context, import of iPhones in the last 12 months (Nov20-Oct21) was mere two percent of total phone imports. The average price of a smart phone imported in Pakistan is $115 over the last 12 months. Over 80 percent of Pakistan’s phone market (by value) is for $200 and below phones. Majority of these phones are now assembled in Pakistan.

Nonetheless, mobile phone imports have been growing in Pakistan. The yearly bill was on average $771 million during FY17-19 and that has increased to $2.1 billion in FY21. The prime reason for the steep jump has been the implementation of DIRPS. With this, phone smuggling has become out of equation. One can estimate that there is a conversion of $1 billion from informal to formal imports by rightly valuing phones.




The other important development is the smart phone policy which came about last year. There are duty incentives for cheaper phones (in dollar value) to boost assembly in Pakistan. The duties on expensive phones have increased to convert the usage towards less pricy phones. These steps are already reducing the share of expensive phones in the market and nothing much can be achieved by imposing further duties.

According to industry sources, Pakistan imported—in the form of semi knocked down (SKDs) and CBUs—about 16.3 million phones in the past 12 months (Nov20-Oct21) for $1,874 million. The average value of a phone is computed at $115.

The low price of phones is constant across all brands – barring the iPhone. For example, average price of Samsung imported phone is $180 and its $209 for One plus. The iPhone is an outlier with an average price of $776. It is pertinent to note that not all phones being imported are new. There are second-hand phones in the tally as well.

Almost all the brands (barring some like iPhone and One plus), either assemble their phones in Pakistan or soon will. During October 21, 80 percent of the phones imported were in the SKD form i.e., out of 957,008 phones imported in Pakistan in October, 76,217 units were in the form of SKD kits. These kits are then assembled in various assembling plants in Pakistan. There is not much foreign exchange savings in making mobile phones in Pakistan; but domestic assembly does create jobs.




The buck doesn’t stop here. The smart phone is an essential good– more important than cars. Many individuals run their businesses on phones. Connectivity and access to phones/tablets is imperative for Pakistan to leapfrog. The government should not increase duties to curb demand through higher pricing.

One could argue that government increases the duties on expensive smart phones. But share of these phones is already declining in Pakistan. No player in cheaper smartphone category can survive without localization. That is why Samsung came into the market. In Oct21, Samsung imported 20 percent of phones as SKD – for testing purposes and to build inventory.

Lately, the company has already started assembling phones in Pakistan. The bigger market share is with Vivo (26%) and Infinix (23%) – both are importing 100 percent SKDs.

Soon Samsung will be producing all (but top value phones) in Pakistan. Next in line will be Xiaomi. As many others are already fully assembling here. The government has increased the tax incentive for localization by increasing the duty on CBUs in this budget. For example, the share of Xiaomi has declined from 6.6 percent during Nov20-Jun21 to 2.4 percent during Jul21-Oct21. Similar is the case for Samsung, where the market share has gone down from pre-budget levels of 9 percent to 7 percent.

The mobile phone policy is working just fine. One could disagree with the policy itself, but not with the efficacy of what it set out to do—at least preliminarily. The important element to see is how the government will live on the policy objective stated last year.

Will the government convert SKD to CKDs in three years? Will the government rationalize duties in three years? Will the government incentivize local parts manufacturing and move towards exports? The history of auto policies suggests that it is hard to implement sunset clauses in Pakistan, and the smartphone policy may face similar issues in the future.
 

ghazi52

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PTA grants license to Select Technologies

By International Pakistan
November 30, 2021






ISLAMABAD – Pakistan Telecommunication Authority (PTA) has granted a manufacturing license to Select Technologies (a wholly-owned subsidiary of Air Link Communication) for the manufacturing of Xiaomi mobile phones in Pakistan.

Air Link Communication Limited is consolidating its position as one of the leading mobile phone distributors and manufacturing companies in the country. Air Link Group already has a license to manufacture mobile phones of Transsion Holding’s major brands i.e. Tecno & iTel. This license makes Air Link Communication Ltd, the only company in Pakistan having manufacturing contracts and license for two leading mobile phone companies in the world.

Earlier this month, Xiaomi, the global consumer electronics and smartphone giant, joined hands with Select Technologies (Pvt) Limited (SELECT), as its manufacturing partner for Xiaomi mobile phones in Pakistan targeting production of initially around 2.5 million to 3 million handsets annually.

This is a significant milestone for the economy as it will reduce the import bill and create jobs for the local population. This is a result of the Government’s policies to enhance localization and stimulate the industrial growth of the country.
 

ghazi52

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Pakistan eyeing to boost cell phone exports

Islamabad achieved 'big success' in manufacturing mobile phones in 2021, says PM's aide on commerce


APP
January 06, 2022


an official of the ministry of commerce said that the spike in mobile phone imports came on the back of increase in orders for luxury mobile phones ie flagship models of brands photo reuters



An official of the Ministry of Commerce said that the spike in mobile phone imports came on the back of increase in orders for luxury mobile phones ie flagship models of brands. PHOTO: REUTERS

ISLAMABAD: Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood on Wednesday said that after achieving “big success” in the manufacturing of mobile phones last year, Pakistan was now seeking expansion into exports.

Pakistan, a net importer of mobile phones prior to 2016, produced 22.12 million handsets during January-November 2021 and imported 9.95 million during the same period, data from the Pakistan Telecommunication Authority (PTA) shows.

In 2020, Pakistan’s import of mobile phones was 24.51 million compared to 13.05 million sets produced locally.

Various Chinese mobile phone manufacturers have played a key role in Pakistan’s production boom in 2021, according to the PTA.
Local manufacturing plants assembled 9.03 million smartphones while the number of 2G mobile phones was 13.09 million.

“I would say that our whole venture into manufacturing mobile phones has been a big success,” Dawood said in an interview with Arab News on Wednesday.

“It has been very successful because we now see that every month the number of mobile phones coming into the country is decreasing and the numbers that are being produced and sold locally is increasing.”

The PM’s aide said the record levels of local manufacturing were achieved under a new “conducive policy” introduced by the current government.

The Mobile Device Manufacturing Policy 2020 set a 49 per cent localization target by June 2023, including 10 per cent localization of parts of the motherboard and 10 per cent localization of batteries.

“We have developed a policy for local assembling of mobile phones … We are currently looking at becoming a world-class assembler of mobile phones,” Dawood said.

“We are right now concentrating on low-end mobile phone sets and we hope that soon we will be able to start getting into high-end phones with world-class companies.”
 

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