As prices of mobile phones are skyrocketing again, people have started questioning the purpose of the localization of phone assembly in Pakistan. Reportedly, mobile phones are even being sold at a premium, and pre-ordered phones are subject to price increases before delivery.
In one related incident, a customer revealed that back in April, Samsung was selling its flagship product S22 Ultra with Buds and a leather case for Rs. 245,000 on pre-order. However, at the moment, the retailers are selling it at a “premium of 15000-20000”. According to one source, upon its launch, the price for the same phone was $1200 (PKR 222k) in the international market, “Right now the launch price has reached PKR 265k.”
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In contrast, the CEO of a major mobile manufacturing company reportedly hinted that cell phone prices might go down by 10 to 15 percent. Separately another mobile company also hinted that the prices of mobiles could go down as local manufacturing gains momentum, attributing the decrease in price to the labor-intensive market in Pakistan. “Price can be expected to go down because the mobile industry is labor-intensive. For instance, labor cost is $1,000 in China and in Pakistan, it is $150,” he said.
Localization of phone assembly
It is pertinent to mention Pakistan’s telecommunication sector witnessed a tectonic shift. In a major development, the country is set to become a net exporter of mobile phones from being a net importer of it. Over the recent months, mobile exports have picked up. This shift is due to the change in policies regarding the import of mobile phones.
The former PTI-led government brought in the “Make in Pakistan” mobile phone policy to facilitate this change. Before the instigation of this policy, Pakistan was spending billions of dollars on the import of completely built units (CBUs).
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According to a report by PTA, Pakistan imported 28.0 million mobiles in 2019 alone. Now, the country produces around 25 million phones as compared to the import, which only peaked at 9.74 million units from January 2021 till October. This is due to the growing local assembly facilities and plants introduced as a direct result of the mobile phone policy.
As Pakistan expanded its mobile exports, the world’s largest mobile manufacturing companies started showing interest in setting up mobile manufacturing plants in the country. As a result, multiple companies, including Samsung and Xiaomi started operating assembly plants in Pakistan.