Wednesday, January 22, 2020

Lower Import Duties Rattle Pakistan's Mobile Handset Makers

Pakistan Federal Board of Revenue has recently announced that “Sales Tax and Income Tax at import stage has been drastically reduced in case of smartphones of Rs15,000 or below". This action was apparently taken after Digital Pakistan Initiative led by Tania Aidrus asked for it. It has come under fire from the country's nascent mobile phone and smartphone manufacturing industry which is producing low-cost mobile phones. Pakistan's mobile handset market is the 8th largest in the world. Current annual demand is for about 40 million units of which 13 million are assembled in Pakistan while the rest are imported, according to a report by Dunya News. The import bill for Fiscal Year 2020 is expected to be about $1.2 billion. Boosting it will save billions of dollars of precious foreign exchange. It will create tens of thousands of jobs and spawn new auxiliary manufacturing industries for chargers, headphones, USB cables, cases, etc.  In future, Pakistan could become a significant exporter of mobile handsets.

GFive Promo. Source: GFive

Mobile Phone Demand:

There are currently 164 million mobile phone users in Pakistan, the 8th largest in the world.  The current annual demand for mobile phones in the country is estimated at about 40 million units, according to Pakistan Telecommunication Authority (PTA). The fastest growing demand is for 4G smartphones.

According to Pakistan Bureau of Statistics, mobile-phone imports (HS Code: 8517.1219) reached $498 million in 5 months period from July to November 2019,  64% jump over the prior year. Fiscal 2019-20 imports are expected to reach $1.2 billion.

Earlier, the growth rate for 4G handsets jumped from 16% in 2018 to 29% in 2019. Imports of mobile handsets soared 69% from $ 364 million in 2018 to $ 615.7 million in 2019. Pakistan is world's seventh largest handset importer and the 8th largest mobile phone market.

Pakistan Telecom Indicators. Source: PTA

Domestic Manufacturing:

Pakistan Telecommunication Authority (PTA) has granted permission to 26 local companies for manufacturing out of which 15 are currently in production. Among those currently producing mobile handsets in Pakistan are: E-Tachi, GFive, Haier, Infinix and Tecno. They are producing  13 million mobile phones.

Domestic manufacturers claim that they can meet 80% of demand for mobile handsets over the next 2 to 3 years if they are sufficiently protected by higher tariffs on imports.

Domestic mobile phone manufacturing industry will save billions of dollars of precious foreign exchange. It will create tens of thousands of jobs and spawn new auxiliary manufacturing industries for parts, chargers, headphones, USB cables, cases, etc.  In future, Pakistan could become a significant exporter of mobile handsets.


Pakistan's mobile handset market is the 8th largest in the world. Current annual demand is for 40 million units. Domestic plants produce 13 million units while the rest are imported.  The import bill for Fiscal Year 2020 is expected to be about $1.2 billion.  The country's nascent mobile handset manufacturing industry fears a serious early setback if the FBR decision to lower duties on imports of foreign made mobile phones is not reversed. It is being blamed on Tania Aidrus, Prime Minister Imran Khan's advisor on Digital Pakistan Initiative, who would like to increase availability of mobile handsets. Domestic mobile phone manufacturing industry will save billions of dollars of precious foreign exchange. It will create tens of thousands of jobs and spawn new auxiliary manufacturing industries for chargers, headphones, USB cables, cases, etc.  In future, Pakistan could become a significant exporter of mobile handsets.

Related Links:

Haq's Musings

South Asia Investor Review

Digitization in Pakistan

Public Sector IT Projects in Pakistan

Pakistan's Gig Economy 4th Largest in the World

Afiniti and Careem: Tech Unicorns Made in Pakistan

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Riaz Haq's Youtube Channel


Riaz Haq said...

Mobile set manufacturing policy being finalised: chief of EDB’s board

Chairman EDB's Board, Almas Hyder on Wednesday said that final touches are being given to Pakistan's mobile set manufacturing policy which will be ready within the month.

While talking to Business Recorder, Hyder stated that the working on mobile set manufacturing policy began eight months ago and so far three-four meetings have been held to prepare the draft policy for the government.

In reply to a question, he said the main reason for the delay in finalization of draft policy was due to gathering of data and the formulation of procedure to acquire technology.

“Policy document is being finalised. I think one more meeting will be required to give it the final touches. We want to make it a driver of export," he added.

Almas Hyder maintained that the main purpose of the policy was to make engineering sector one of largest export-oriented sectors of Pakistan. This implies if the export of textile sector earns $ 12 billion per annum, then engineering sector would cross $ 12 billion benchmark within the next 8 to 10 years. He said that cell phone industry can contribute $500 million to $1 billion in exports of engineering goods.

“We will attract local as well as global players of mobile set manufacturers," he continued.

Mobile phone manufacturing is one of the biggest industries worldwide. This industry is now moving out of China and into countries such as India, Bangladesh, Indonesia and Vietnam.

A couple of days ago, Adviser to the Prime Minister on Commerce and Industries and Production and Investment, Abdul Razak Dawood said that the government will give incentives to local mobile phone manufacturers.

Ministry of Industries and Production announced last year that the mobile set manufacturing policy will be unveiled in November 2019. However, despite several consultations with stakeholders over a period of 10 months EDB has yet to present a draft to the Ministry of Industries for submission to ECC for approval.

Currently, there are more than 10 domestic assemblers of mobile phones. Most of them are producing 2G feature phones & waiting for Government policy to upgrade themselves to manufacturers of 4G smart phones. A Pak-China joint venture to locally assemble smart phones has already been set up in Karachi with an initial investment of Rs 160 million.

Prime Minister Imran Khan has been directing his economic ministries to create an environment conducive for investment, domestic & foreign, in the sub-sector which would lead to creation of job opportunities.

Industry sources state that mobile phone assembly is a labor intensive activity which if duly incentivised, can create over 120,000 jobs within a period of three years. Most of these jobs will be for skilled workers & young electronics engineers graduating from local universities.

Industry is demanding a clear roadmap from the Government – from assembling mobile phones and progressively encouraging localization of components & mother board assembly – over a period of 3-4 years.

Representatives of local manufacturers believe that after successfully introducing IMEI registration by the PTA in March 2019 all chances of smuggling and grey imports of mobile phones have been eliminated. This industry can now be used as a game changer for creating a base of Electronics sector in Pakistan which has a requirement of around 40 Million handsets on an annual basis.

Riaz Haq said...

GVCs – a fillip for exports

Sync with Global Value Chains (GVCs) is imperative for Pakistan to grow its struggling exports. In 1990, the ratio of GVCs to traditional share in exports was 40:60. Today it's almost at 50:50. Pakistan has lagged behind. Emphasizing on catching up, SBP has published a special section on GVCs in its recent quarterly economic update.

GVC in modern world can be explained by the iPhone example. Designed in US; assembled in China and Vietnam; components to assemble are supplied by South Korea and Japan; and sold across the globe. The GVCs have made the economies think beyond domestically available resource based value added exports. For example, Bangladesh has become the second biggest world supplier of garments without any cotton production. Vietnam has created its niche in outer structure and final assembling of mobile phones by importing high tech components; it's the world third biggest mobile phone manufacturer including 40 percent of Samsung mobiles.

Meanwhile, Pakistan has continued concentrate on traditional exports within its low base in developed markets. The share in global demand of developed world shrunk from 81 percent in 1995 to 62 percent. The share of emerging economies is expected to increase further to 51 percent by 2030. Pakistan should look for new markets in a non-traditional way.

In 1995, foreign value added components of Pakistan's exports was 4.8 percent. In 2015, the ratio inched up to 5.6 percent. Consistently, 95 percent of country's exports are on value addition on domestic components such as cotton, rice, animal hides etc. Our foreign value addition in textile products is in the form of chemicals and dyes, high quality cotton, manmade fiber etc. Such process is termed as backward participation.

Pakistan's share in GVCs is mostly in forward participation i.e. some other country adds value in Pakistan's exports to re-export. For example, yarn and fabric are exported to China, Bangladesh and Turkey, which produce and export value added products to stores like Zara, Marks & Spencer and H&M.

Pakistan needs to create linkages with original brand manufacturers, and original brand designers. The textile sector lacks diversification in higher unit value manmade fibers. A good example within the country is of denim trousers (jeans) where exporters are contributing in the supply chain of brands like Target, Gap, Levi's etc.

There are two other sectors where we have footprints in GVCs – Medical Devices and ICT services. In the former, the skill set is clustered in Sialkot and 98 percent participation is in precision metal instruments. The low value addition does not lure multifetal enterprises (MNEs) to invest in Pakistan. These have production facilities in Malaysia, Mexico and Dominican Republican. Upcoming SEZs and EPZs should focus on bringing MNEs to become part of GVCs.

The way forward is to enhance Pakistan's share in GVCs within sections of existing exports – positioning for brands by improving quality standards in forward participation. Find new avenues to develop backward participation. World top five exporting sectors are electrical and machinery, petro chemical and non-metal minerals, transport equipment, metal products, and financial intermediaries and business activities. Pakistan's share ranges from 0.00 to 0,03 percent in global exports of these sectors.

The foremost important factor for enhancing footprint in GVCs is to liberalize trade (tariff) policy. For details read “National Tariff Policy – the long haul". SBP noticed that the tariff liberalization started in 2000s is non-uniform, “Some industries such as automobile and steel, have continued to enjoy higher protection, which fueled an anti-export bias". Government should end the protection to redirect the flow of productive capital in export oriented sectors.

Riaz Haq said...

The Standard Chartered SDG Investment Map reveals an almost USD10 trillion (USD9.668 trillion) opportunity for private-sector investors across all emerging markets to help achieve the UN’s Sustainable Development Goals (SDGs), with Pakistan representing USD96.2 billion of that totals. The study identifies opportunities for the private sector to contribute to three infrastructure-focused goals between now and 2030: SDG 6: Clean Water and Sanitation, SDG 7: Affordable and Clean Energy and SDG 9: Industry, Innovation and Infrastructure across emerging markets. Need for private investment intensifying.

The greatest investment opportunity in Pakistan is found in achieving and maintaining universal access to electricity (a key SDG 7 indicator), representing a USD44.7 private-sector opportunity. This considers the proportion of the population currently without electricity access (29 per cent), projected population growth, and the growing demand for power as the economy develops.

There is also significant opportunity for investment in digital infrastructure, with a potential private-sector contribution of around USD34 billion needed to achieve full digital adoption (measured by a combination of mobile phone subscription rates and internet connectivity). Digital access is a key indicator for SDG 9, which encourages improvement in industry, innovation and infrastructure. The other SDG 9 indicator in Opportunity2030 is transport infrastructure. To significantly improve Pakistan’s transport infrastructure by 2030 indicates a USD13.5 billion investment opportunity for the private sector.

The opportunity in the water and sanitation sector is smaller but could make a significant impact. Almost a quarter (24 per cent) of Pakistan’s population still do not have access to clean water and sanitation, a key SDG 6 indicator. Closing this gap by 2030 will require significant investment, with an opportunity for the private sector to provide around USD4 billion of the funding.

Shazad Dada, Chief Executive Officer at Standard Chartered, said: “Pakistan has demonstrated strong commitment to the UN Sustainable Development Goals by becoming the first country to adopt the SDGs as part of its national development agenda through a parliamentary resolution. The private sector will play a crucial role in enabling Pakistan to hit these targets and there is substantial opportunity for investment that supports infrastructure development, including digital, energy provisioning as well as clean water and sanitation.

“Opportunity2030 provides an important map of the SDG opportunities for private sector investors looking to invest with impact and improve the lives of millions of Pakistanis over the next decade.”


Market Water and sanitation (SDG 6) Access to power* (SDG 7) Transport infrastructure (SDG 9) Digital access (SDG 9) Total
China USD26.1bn N/A USD2.310tn USD492.8bn USD2.829tn
India USD19.2bn USD701.5bn USD176.9bn USD226.5bn USD1.124tn
Indonesia USD4.0bn USD147.5bn USD75.5bn USD53.7bn USD280.7bn
Bangladesh USD3.2bn USD73.9bn USD21.6bn USD33.3bn USD132.0bn
The Philippines USD1.9bn USD61.3bn USD26.1bn USD28.2bn USD117.5bn
Nigeria USD5.7bn USD32.3bn USD28.8bn USD47.4bn USD114.2bn
Pakistan USD4.0bn USD44.7bn USD13.5bn USD34.0bn USD96.2bn
Thailand USD0.7bn N/A USD40.6bn USD17.0bn USD58.3bn
Vietnam USD1.3bn N/A USD20.1bn USD24.4bn USD45.8bn
Kenya USD2.3bn USD15.6bn USD9.1bn USD13.0bn USD40.0bn
Malaysia USD0.4bn N/A USD25.8bn USD8.8bn USD35.0bn
Ghana USD0.8bn USD7.8bn USD4.1bn USD6.9bn USD19.6bn
Sri Lanka USD0.2bn USD7.3bn USD4.6bn USD4.1bn USD16.2bn
Uganda USD0.8bn USD6.1bn USD2.8bn USD4.0bn USD13.7bn
Zambia USD0.7bn USD4.0bn USD1.6bn USD3.2bn USD9.5bn

Riaz Haq said...

Incentives in the works to diversify exports

The Imran Khan government plans to introduce significant time-bound, structured fiscal incentives and protection for 20 industries other than the five zero-rated sectors besides ensuring their easier access to cheap short- and long-term finance for diversifying and boosting the country’s stagnating exports.

The incentives will be part of the new Strategic Trade Policy Framework (STPF) expected to be finalised in the next couple of months, Commerce Secretary Ahmed Nawaz Sukhera told Dawn on Thursday.

"The government is looking beyond the five zero-rated export sectors including the textile. It is time we also focused and facilitated industries like light engineering, chemicals, IT, etc with substantial potential to diversify and increase our exports," he said.

"Textile industry does have the potential to enhance its foreign sales but it can push our overall exports only so much. We need to encourage other industries with untapped potential."

Pakistan’s trade gap has shrunk 31pc to $11.6 billion in the first half of this fiscal year to December, primarily on the back of 17 per cent compression in imports, which dropped to $23.2bn. Meanwhile, exports have risen by a mere 3.2pc to $11.5bn despite steep currency devaluation during last one and a half years and energy subsidies given to textiles, which fetch 55-60pc of the country’s total proceeds from foreign sales.

According to a World Bank report, the country’s share in the global exports has declined from a peak of 0.18pc to 0.13pc in 2018 with the bulk of them are resource-based or commodities.

"We are moving in the direction of export-led economic growth and away from import substitution policies. The global experience shows that you cannot pursue both export growth and import substitution policies simultaneously; so we have decided to increase competitiveness of our industries with export potential," Sukhera said.

The stabilisation on the external front in the recent months has created room for the State Bank to help exporting industries, and enhance the financing limit for exporters though its subsidised loan schemes — Export Finance Scheme (EFS) and Long Term Finance Facility (LTFF) — by Rs100bn for the full year.

Under EFS exporters are eligible to receive short-term loans at 3pc to meet their working capital requirements while LTFF caters to their needs for long-term funds to import machinery and plants. For the textile sector, LTFF is available at 5pc and for others at 6pc.

SBP Governor Reza Baqir, who has repeatedly underscored the importance of increasing exports to pull the country out of the frequent boom-and-bust cycles, says the scope of these schemes will be extended to more industries and sectors with export potential.

Experts say the current account stability based on massive import compression is hurting the industry and could backfire if exports are not increased substantially and swiftly. The current account deficit has squeezed by 73pc in the first six months of this fiscal year.

Riaz Haq said...

In this age of of global supply chains, very few if any products are made in just one country; multiple countries add value to the finished product. Some make components while others build subassemblies and still others do the final assembly. All countries participating in the value chain create jobs and make money in the process

Riaz Haq said...

PTCL to build #Pakistan’s first high-perf #telecom 200G #network with #Nokia. PTCL CTO: “We have enhanced the existing capacity from 100G optical network to 200G to take care of the growing traffic in these cities (#Karachi, #Lahore, #Islamabad)” #fiber

Pakistan Telecommunication Company Limited (PTCL) has deployed Nokia’s technology to expand the capacity of its recently installed 100G transport network to 200G optical network for both domestic and international traffic.

This capacity expansion has been carried out in the major cities of Islamabad, Lahore and Karachi to keep pace with the growing demands for capacity from both individuals as well as enterprises.

The deployment makes PTCL the first operator in Pakistan to deploy high-performance 200G 8 Quadrature Amplitude Modulation (QAM), an optical long-haul technology offering more capacity at lower cost. The upgrade of its optical network allows PTCL to address the growing demands of bandwidth, enabling its enterprise and individual users in Pakistan’s largest cities to use high-bandwidth services and applications such as HD and 4K video.

In addition, the network upgrade allows PTCL to enhance network capacity with the Software Defined Network (SDN) capabilities of Nokia’s optical solution. Further, the unique flexgrid technology will enable PTCL to upgrade to 300G or 400G in the future over the same installed base.

Saad Muzaffar Waraich, Chief Technology & Information Officer, PTCL, said: “We have enhanced the existing capacity from 100G optical network to 200G to take care of the growing traffic in these cities.”

Carlo Corti, Director of the Optics Business Development, MEA, Nokia, said: “Our field-proven technology enables PTCL to provide the best-in-class network experience to its subscribers. With our 200G technology, PTCL is now in a position to cost-efficiently address the ever-growing demand for capacity.”

Riaz Haq said...

Infinix becomes first smartphone brand with manufacturing facility in Pakistan

Infinix, with its latest and high-quality premium products, is one of the leading smartphone brands in Pakistan. It has continued growing stronger, and one of the primary reasons is the company’s continuous investment and contribution to the economic and labor empowerment in the country. Now very proudly Infinix becomes the first smartphone brand manufacturing in Pakistan.

Fully aligning with the country’s initiative of “Made in Pakistan”, the company keeps growing its investment to contribute to turn the country into a regional tech hub, and it just got one step further towards its mission and local commitment to put Pakistan on road to progress and prosperity. This Chinese smartphone brand’s manufacturing facility being located in the country helps prevent unnecessary worry of Corona Virus and the inaccessibility of newest Infinix products, and also fulfills its aim of playing its role in empowering the local labor, and particularly women, as 60% of the workforce working in the Infinix Pakistan factory are women.

The manufacturing vicinity was also visited by the Consul General of the People’s Republic of China, Mr. Li Bijian, who applauded Infinix’s contribution in promoting local employment in the country.

Talking about their company mission, CEO of Infinix Pakistan Mr. Joe Hu said, “Infinix’s vision as a company is to enrich our customer’s experiences, whether it is through our products, or what goes in their manufacturing. To be able to play a small part in the empowerment of the labor force in Pakistan, and particularly the women of the country is an important step further towards our mission.”

Riaz Haq said...

EDB-BoM gives go-ahead on mobile device manufacturing policy

In a meeting of the Board of Management of Engineering Development Board (EDB), chaired by Mr. Almas Hyder, the mobile device manufacturing policy was approved for submission to Ministry of Industries & Production. The policy has been drafted, after extensive stakeholder consultation, with the objective to encourage local manufacturers in this sector through technology acquisition & localization.
The proposed policy is expected to promote local investments and FDI. Local device manufacturing activity is projected to create 200,000 direct and indirect jobs in the country alongside development of efficient manufacturing eco-system and linking Pakistan to the global supply chain. Needful to mention is that Pakistan is the 7th largest market for mobile sets with annual sales of 34 million sets in 2019. With an increasing demand and competitive advantage of labour cost, it can develop into a major industry capable to generate export surplus to sell its brand of “Make in Pakistan” in the international markets.
The Board also deliberated on the Electric Vehicle Policy drafted by EDB in consultation with concerned stakeholders. It was proposed to have a comprehensive policy framework to not only cater for EV but that covers emerging technologies in this sector as well as ensuring that the supply chains of the existing players may not be disrupted. The Board emphasized on the need to have a favorable incentive regime to promote local investments and attract FDI.
A comprehensive plan for participation of engineering sector in international trade fairs/exhibitions were also presented in the meeting. The members appreciated efforts made by EDB’s management to promote engineering sector of Pakistan.
The Chairman advised to organize trade delegations to various Free Trade Zones of African to tap the huge export potential in this region. Members also advised to look for trade opportunities in European and American markets.
CEO-EDB also briefed the Members on the competitive/efficiency improvement and export enhancement exercise being undertaken by EDB. In this regard 350 companies, Associations, Chambers were approached to invite proposals in order to address the anomalies in tariff cascading, procedural delays in availing benefits like DTRE and technological constraints in meeting international bench marks.

Riaz Haq said...

#Pakistan #mobilephone #manufacturing co to export soon. Transsion Tecno is operating 3 production lines with a capacity to assemble 3 million #smartphones annually. The company has plans to localize production of 49% of handset parts in next 3 years.

Transsion Tecno mobile manufacturing firm, a joint venture between Pakistan and China is all set to manufacture 49 percent of its mobile phones in Pakistan in the coming years, informed Federal Minister for Economic Affairs Hammad Azhar.

“They will be focusing now on exports as their plant in Pakistan is most efficient of all owned by Transsion group globally (excluding China)," said Azhar, after his meeting with Transsion Tecno CEO, Aamir Allawala, at their phone assembly plant.

The minister said that in the next three years the company has targeted to localize production of 49pc of handset parts. “A huge export potential e.g. Vietnam is exporting USD37 billion of handsets annually," he said

Hammad said Transsion Tecno started producing three million handsets per annum and is increasing its production to up to 13 million handsets within a year.

He said that the introduction of DIRBS [Device Identification, Registration and Blocking System] has eliminated the menace of smuggled sets, and has been an instrumental factor in opening up the market.

Currently, Transsion Tecno is operating three production lines with a capacity to assemble 3 million smartphones every year. In terms of human resources, the company has on board 750 skilled workers, 70 engineers, and nine Chinese experts.

Aamir Allawala, the CEO of Transsion Tecno in his interview with BR Research had said that mobile phones can become Pakistan's biggest export item, surpassing textiles, if the country is able to tap into this market.


An interview with Aamir Allawala, CEO Transsion Tecno Electronics ‘Mobile phone exports can surpass textiles’

Amir Allahwala: "There are 164 million mobile subscribers. The handset market size is about 40 million units with 27 million units currently being imported and 13 million (which are mostly 2G) manufactured locally in the country. These are feature phones and we believe the future is smart. If we had to put a number to it, the potential handset market size should be over 60 million units annually. This would make us one of the top 10 handset markets in the world."

Riaz Haq said...

BR Research: Start by telling us about this new venture for mobile handset manufacturing in Pakistan.

Aamir Allawala: This project, I would say, marks the beginning of CPEC Phase II and it is a clear signal that Pakistan is open for big foreign investment. In the smartphone industry, this is the first Chinese investment in Pakistan. I would first like to give you a little bit of a background about us. Our company Tecno Pack has been in business since 1971. We have been manufacturing automobile parts (for cars, tractors and motorcycles) over the past few decades, and we did a recent Joint Venture project with Suzuki Japan with an investment of Rs2.87 billion. We employ about 2100 workers at our 5 manufacturing plants. Over the years, we have ventured into electronics manufacturing as well. We found this opportunity for mobile manufacturing, saw the wide gap that exists in the market, and immediately grabbed it. This brought our new partnership with Transsion Holding which is a Chinese manufacturer of mobiles phones, one of the top in the world in terms of volumes with sales of over 124 million in 2018. Apart from China, it has factories in India, Bangladesh, Ethiopia and with this new investment, Pakistan.

BRR: What is the total investment, your equity and the current assembling capacity of mobile phones?

AA: The total investment is Rs480 million and we have a 60:40 arrangement with Transsion China. Currently we are operating three production lines with a capacity to assemble 3 million smartphones every year. In terms of human resource, we have on board 750 skilled workers, 70 engineers and 9 Chinese experts.

BRR: How big is the mobile phone market in Pakistan and what is the potential here?

AA: There are 164 million mobile subscribers. The handset market size is about 40 million units with 27 million units currently being imported and 13 million (which are mostly 2G) manufactured locally in the country. These are feature phones and we believe the future is smart. If we had to put a number to it, the potential handset market size should be over 60 million units annually. This would make us one of the top 10 handset markets in the world.

This is a big space. We need a new plan for Pakistan where we are not just importing and consuming, but also contributing to the production and creating jobs. The first step to do that is to get into industrial assembly. We can train more skilled workers and build an industry foundation by adopting phase-wise localization. As localization grows, technology transfer happens and industry expands. Mobile phone manufacturing can be that industry.

We have examples from countries where the mobile phone industry has transformed the whole economy Look at Samsung in Vietnam. In 2014, Samsung set up its first factory in Vietnam and today, Samsung has an investment of over $17 billion in the country. It contributes 28 percent in Vietnam's GDP, it has more than 100,000 employees and in terms of mobile phones, nearly $37 billion of exports are made by Samsung from Vietnam. When other countries saw Vietnam's growth, they have raised their hands to participate.

India is bidding to become the next China. In mobile phones, within three years of announcing a mobile manufacturing policy, they have 268 factories producing mobile phones and accessories with 61 brands in production including Samsung, Apple, Oppo, Vivo etc. They have now become the second largest mobile producer in the world after China. Last year India produced 225 million units and 95 percent of mobile phones sold in India are made in India.

Then there is Bangladesh. It started final product assembly–which is the first step– in 2017. Brands include Samsung, Oppo, Vivo, Infinix etc. and it is now assembling mobile phone motherboards as well.

Riaz Haq said...

PTI govt approves mobile phone manufacturing policy

The mobile phone manufacturing policy would ensure “localisation and indigenisation of parts of mobile phones”, said the finance ministry.

“The country faces a serious security threat as there is a growing concern of Indian-manufactured smartphones using other countries’ Type Allocation Code within the initial eight-digit portion of the 15-digit International Mobile Equipment Identity (IMEI) used to uniquely identify wireless devices,” said the information technology ministry.

It may be technically very difficult for Pakistani authorities to identify and restrict the import of Indian assembled/manufactured smartphones with other countries’ IMEI numbers, it added. Samsung is currently operating the world’s largest mobile handset factory in India.

Under the Mobile Device Manufacturing Policy, parts of mobile handsets will be used in the entire range of mobile handsets produced in Pakistan instead of being limited to a particular model. The policy will have a positive impact on allied industries including packaging and plastic. The expected manufacturing of high-end brands would give the domestic industry an opportunity to become part of the global value chain, said the finance ministry.

Tax incentives

The ECC approved the removal of regulatory duty charged on the import of completely and semi-knocked down (CKD/SKD) manufacturing devices by Pakistan Telecommunication Authority (PTA)-approved manufacturers under the Input/Output Co-Efficient Organisation (IOCO)-approved import authorisation. The ECC approved the abolition of fixed income tax of up to Rs1,740 per handset on the CKD/SKD manufacturing of mobile devices having an import value of up to $350.

However, it increased the fixed income tax on the $351-500 category handsets by Rs2,000 or 37% to Rs7,400 per set. Similarly, the mobile sets having an import value of more than $500 will be subject to an additional Rs6,300 or 68% income tax, bringing total per handset income tax to Rs15,570.

The ECC approved the removal of a fixed sales tax on the CKD/SKD manufacturing of mobile devices.

PTA will also allow activation of handset manufacturing in the country under import authorisation under the special category to eliminate misdeclaration in the parts category at the import stage.

The activation of completely built units (CBUs) imported through notified routes after payment of all levied duties and taxes, as fixed by the government from time to time, will continue till further amendment.

The government also approved a research and development allowance of 3% for local manufacturers on the export of mobile phones. The locally assembled and manufactured phones will be exempt from a 4% withholding tax on domestic sales.

The government will maintain tariff differential between CBU imports and CKD/SKD manufacturing till the expiry of the policy. The domestic industry will ensure the use of local parts and components as per the road map in the draft policy.

Riaz Haq said...

#Pakistan Business Council warns accession to the World Trade Organization’s (#WTO) treaty of free #trade of #IT products to break #cellphone & other #electric products #manufacturing dream. #technology #Smartphones #Electronics #informationtechnology

PBC, in a report on Thursday, expected the information technology agreement (ITA) to cause jobs and revenue losses and suppress potential for exports.

“The ITA will result in a net loss to the economy by replacing locally manufactured products with imported ready-to-sell products in the ITA listed categories,” said the council. “This will not only undermine the efforts to encourage investment by electronics manufacturers in Pakistan, but it will also cost Pakistan its independence to apply policy interventions to gradually increase its product space for exporting electronic products.”

The agreement aims to eliminate custom duties and reduce non-tariff measures which restrict trade in IT and electronic products. The goal is to increase global trade and competition in IT goods and services, increase adoption of technology and spur innovation in the sector. ITA accounts for 97 percent of world trade in IT and electronic products with trade volume of $3.7 trillion in 2019.

“There is an inconclusive evidence to suggest ITA is an appropriate avenue to expand a country’s capability in manufacturing and exporting electronics and IT products,” said the PBC. “Whilst counties that a signatory to the ITA have increased their IT and electronic product exports, non-signatories have also increased exports manifold.”

India and Bangladesh use cascading tariff structure to increase localisation and manufacturing of electronics in their countries. India, being signatory to the agreement, is facing international disputes in the WTO for adopting policies for localising manufacturing of electronics, claiming them to be against the ITA protocols.

The information technology agreement is not bound on any member country of the WTO. It has so far been signed by advanced economies that already have strong exports base of IT products.

Pakistan’s imports of ITA related products rose six-fold between 2003 and 2019, significantly higher than the global average. The imports recorded a compound annual growth rate of 13.2 percent during the period. The growth rate was much higher than the global average of 8.4 percent, according to the PBC

The business council said the country has experienced de-industrialisation due to policies that discourage manufacturing and make it easier to import finished products.

PBC said allowing across the board zero duty on components and finished, ready-to-sell electronics, will result in closure of existing manufacturing units, and also discourage additional investments in production facilities for electronics.

“By disallowing cascading of tariffs under ITA, and removing the advantage for local manufacturing, for example as envisaged in the mobile phones manufacturing policy, companies such as Samsung may lose interest to invest in smartphone assembly in Pakistan,” it said. “Not only will this have an adverse impact on the external account, Pakistan will also miss opportunities to acquire technologies in manufacturing electronics by reducing the chances of foreign companies to enter Pakistan.”

The council said the Federal Board of Revenue estimated revenue loss of Rs3.5 billion from 105 tariff lines following Pakistan’s accession into the ITA.

Though imports of ITA-based products are a good proxy measure of technological adoption and accession to ITA will lead to zero-rated imports of electronics, it will further delay development of IT manufacturing sector.

Riaz Haq said...

Local mobile phone manufacturers have urged the Ministry of Industries and Production to implement Cabinet decision of exempting four percent withholding tax on the sale of Pakistan made handsets.

In a written letter to the Engineering Development Board (EDB) the Pakistan Mobile Phone Manufacturers Association (PMPMA) while urging the Ministry to exempt the sales of local manufactured cell phones from 4 percent withholding tax has requested for the implementation of June 2, 2020 Cabinet decision.

The letter was sent to Chief Executive Officer (CEO) EDB by PMPMA, copies of which have also been sent to Industries Minister and other Ministries, the Association revealed.

According to official sources the PMPMA since the approval of the mobile device manufacturing policy in June 2020, has repeatedly requested the relevant officials for the implementation of the policy in letter and spirit, so that they can optimise their operations but so far the ministry does not appear to be serious in implementing the policy.

This was the industry’s perception after the meeting held in the office of Minister of Industries on 3rd September, 2020 and subsequent follow up meeting with the Chairman and CEO (EDB) held in Lahore on 18 September, 2020.

Pakistan Mobile Phone Manufacturers Association deliberated the issue and raised the following five point opinion in the letter: (i) the exemption of 4 percent withholding tax on local sales of locally manufactured mobile phones is an integral part of the mobile device manufacturing policy approved by the federal cabinet on 2nd June, 2020.

(ii) The exemption is absolutely critical to provide a level playing field to the local industry which consists of more than 15 manufacturers and provides employment to over 7 to 10 thousand. Moreover the local cell phone manufacturers are planning to expand their plants to produce more handsets to meet the local demand for mobile phones.

(iii) If the exemption, already approved under the MDMP, is not notified, it shall disturb the differential envisaged under the MDMP between the duty and taxes on CKD/SKD kits of locally manufactured mobile phones as compared to CBU imports into the country.

(v mobile phone industry is strategic a sector which, if properly incentivised, can provide employment opportunities to over 200,000 Pakistanis, and within a short period of time, create export opportunity worth billions of rupees.

Riaz Haq said...

Interest in cellphone assembly grows as smuggling falls
PTA has so far permitted 24 companies to assemble handsets in Pakistan

Last month, Pakistan began local manufacturing of mobile phones, which is expected to open further avenues of investment in the country and create employment opportunities.

Chinese company Transsion Holdings and Pakistan’s Tecno Group have formed a joint venture called Transsion Tecno Electronics Ltd (TTE) with the Chinese company having 40% shareholding while the remaining 60% stake is held by the Pakistani firm.

The joint-venture company – the first 3G/4G smartphone manufacturing facility in Pakistan – has initial capacity to produce 1.8 million units annually on a single-shift basis with over 800 skilled workers below 30 years of age.

“The value of Pakistan’s mobile phone market stands at Rs366 billion, which is even higher than the value of the auto sector which is around Rs360 billion,” remarked TTE CEO Asif Allawala. “Interestingly, the government drafts policies conducive for the auto sector but ignores the mobile phone industry.”

He added that the industry would not be able to sustain much longer if the import of smartphones remained cheaper than local manufacturing.

Mobile industry worldwide

The mobile phone sector ranks among the five biggest industries in the world with sales revenue of $522 billion and over 6 billion devices sold annually.

China has been enjoying the label of being the global hub of handset manufacturing since 2010. The country exports mobile phones worth over $150 billion a year.

However, the handset production is now moving out of China due to rising labour cost and a prolonged trade war with the US.

“On average, Chinese labour costs $600 per month while Pakistan’s labour is much cheaper at only $120 per month,” said the TTE CEO.

However, Pakistan still remains far behind in the race of providing cheap labour force as many other Asian nations are increasingly luring mobile phone assembly companies by offering low-cost workers.

Most of the demand for mobile phones stems from Asia and Africa while markets in Europe and North America are on a saturation point, hence, their trend remains more or less flat each year. This provides a further incentive to the mobile phone manufacturers to relocate their units to Asian nations.

According to Statista, 1.5 billion units of smartphones were sold in 2019 worldwide. The number had been 122 million in 2007.

Pakistan’s market

Pakistan has 164 million cellular subscribers out of a population of 207 million. The country ranks seventh among world’s largest handset importers.

Alone in 2015, the country saw 114 million mobile subscriber identity modules (SIMs) sold with 46 million supporting 3G/4G while 68 million were 2G subscribers.

“Due to its mammoth size, no global brand can ignore Pakistan’s market,” said TTE Director Aamir Allawala. “The country’s annual market size, including 2G, 3G and 4G, is estimated at 34 million units.”

That meant the country’s demand for mobile phones remained in millions every year as a cellphone, especially smartphone, was changed by many consumers after two to three years, he said.

Pakistan Telecommunication Authority (PTA) has successfully tackled the handset smuggling. Government’s endeavours to curb grey channels have yielded results as the country recorded 110% increase in legally imported mobile phones in 2019 compared to 2018.

“According to analysis, an increase of 110% has been seen in legal import of devices from the formal channel,” confirmed a PTA spokesperson to The Express Tribune.

Over more than a year ago, the government started blocking the mobile sets (smuggled phones) that were not approved by PTA with the help of Device Identification, Registration and Blocking System (DIRBS).

Riaz Haq said...

Smartphones Policy to Create 50,000 Jobs in the Next Few Years

There are about 16-18 cell phone manufacturers operating in Pakistan and a few others are coming. These plants are providing jobs to about 25,000 people – mostly young boys and girls. The industry experts are of the opinion that 50,000 more jobs will be created in the segment in the next few years. Some say that 70 per cent of jobs would be for women.

One auto parts manufacturer in Karachi delved into the smartphone assembling in the early days and is producing around 500,000 units a month for the local market. He is confident that the capacity would double in a year and the production will reach a million units a month.

Another player in Lahore is making a state-of-the-art mobile assembly facility which is going to be operational in January 2021. The aim is to reach 500,000 units a month by March-April; and by June-July, the facility will start expanding. The aim is to reach a million units a month by the end of 2021. The assembler is the biggest importer of smartphones in Pakistan and is doing backward integration.

The mobile phone formal industry is growing fast. In yesteryears, around 800,000-900,000 units used to be imported a month in Pakistan through formal channels. After the induction of Device Identification, Registration and Blocking System (DIRBS), illegal imports of the phone is no longer possible. Due to this and lockdown, smartphone imports went up to 2-2.2 million in June 20. Overall, the monthly average import in Pakistan is standing around 1.3-1.5 million units a month in 2020.

Majority of the phones are in the category of $200 or low, and all these would probably be assembled in Pakistan within a couple of years. Any company that would not decide to assemble in Pakistan could be wiped out in the cheap smartphone segment. That could be a worry for Samsung. The company operates in all segments. Its premium phones would keep on coming as imported units – but the segment is small. If the company doesn’t start assembling here, it risks losing market share. it is still mulling on the assembly idea.

Apart from Samsung, big Chinese brands such as VIVO and OPPO are also weighing options of starting assembly in Pakistan, and VIVO could be one big player in a few years in the local market assembling. Once big companies come in and set up units in Pakistan, parts manufacturing may start taking place at home. There will be a huge spillover for the local assemblers.

The smartphone policy is envisaging in stage 1 (2020-21) to start assembling units here – that is happening and credit goes to EDB and Ministry of Industries. In stage 2, the plan is to have a charger, Bluetooth, handsfree, and motherboard (PCB) assembly by 2022. Housing and other plastic parts manufacturing to start in 2023, and stage 4 is to make display and battery by 2025.

For all these steps, big Chinese and Korean players should come and assemble here. PM Imran Khan should take this initiative and talk at the government-to-government level. The ground is being laid. The industry players are charged, the gaps in cellphone and data penetration still exist and the government needs to work on rolling the right infrastructure. The smartphone assembly could well be the first step of Pakistan venturing into the tech hardware.

Riaz Haq said...

Pakistan: 1.2 million #smartphones manufactured in first two months of 2021. These phones were manufactured at the 33 local #mobile devices assembly plants in #Pakistan. #manufacturing – Gulf News

The number of smartphones assembled and produced in January and February 2021 indicate a significant increase as compared to the last two years. The country produced 2.1 million smartphone devices in 2020 and 119,639 in 2019, according to Pakistan Telecommunication Authority (PTA).

The country has produced over 25 million mobile devices including 4G smartphones following the successful implementation of PTA’s Device Identification, Registration and Blocking System (DIRBS).

“With the successful execution of DIRBS, the local assembly industry has evolved from infancy to well-growing stage, with significant growth seen in the local assembly of smartphones,” PTA said. The system implemented in 2019 also led to a significant increase in legal imports of mobile devices.

In 2020, Pakistan approved its first mobile device manufacturing policy to attract investment and encourage manufacturers of major cell phone brands to set up plants in Pakistan.

Job opportunities
The policy also aims to create more job opportunities in Pakistan, create smartphone research and development centers and boost the production of electronic equipment in Pakistan.

The government’s offered several tax incentives and abolished withholding tax on locally assembled phones which encouraged the investors to set up companies in Pakistan, says Minister for Information Technology and Telecommunication Syed Amin ul Haque.

Leading smartphone brand Infinix currently has the largest mobile phone production and assembly plant in Pakistan where 3 million units are produced each year.

Vivo, Airlink and Advance Telecom are the three new companies that will soon establish their manufacturing units in Faisalabad, Lahore and Karachi.

PTA also received several mobile device manufacturing applications after finalizing its mobile device manufacturing regulations which “will help create more jobs in this technical sector, as well as enable consumers to buy locally manufactured mobile devices.”

5G connectivity
Pakistan’s telecom sector offers attractive investment opportunities as it boasts of 178 million mobile phone subscribers with 93 million 3G-4G users, according to the January 2021 data.

Pakistan is also set to launch 5G mobile phone connectivity by December 2022 following a successful trial by PTA in February 2021.

The demonstrations included remote surgery, cloud gaming and overview of anticipated 5G technology applications for social and economic development of Pakistan.

“With the successful 5G trial in a limited environment, we believe that this technology will unlock new realities for eHealth, smart homes and cities, agriculture, autonomous vehicles, cloud computing, Internet of Things and Artificial Intelligence” Nadeem Khan, acting CEO of PTCL Group said.

Riaz Haq said...

#Pakistan Engineering Development Board on #mobile #phone #manufacturing : TranssionTecno’s Itel, Infinix & Tecno are producing 650,000 units per month in #Karachi. Airlink’s plant in #Lahore has production capacity of 500,000 to 800,000 units per month.”

In recent news, the Engineering Development Board (EDB), which is a technical arm of the Ministry of Industries and Production (MoIP), has begun working on a framework for the local assembly of tablets, smartphones, and other related mobile accessories in the near future.

The MoIP further stated that the smartphone industry could be larger than the existing automotive industry in the upcoming years due to the high demand for devices across the country. Hence, this report has been formulated in line with the Mobile Device Manufactur­ing Policy of the Pakistan Telecom Authority, whereas the manufacturing plants fall under the ambit of the EDB.

EDB further added:
“TranssionTecno, Kara­chi-based company assembles three brands including Itel, Infinix, and Tecno, has increased local assembly from 150,000 units to 650,000 units per month. Airlink Communication Ltd has commenced its test trials at its plant in Lahore, and has the production capacity of 500,000 to 800,000 units per month.”

Moreover, the EDB General Manager Policy Asim Ayaz stated that this policy provides sufficient advantage to the local manufacturing of smartphones especially below the price range of $200 in comparison with imported sets which normally are too costly for consumers to purchase.

Riaz Haq said...

Smartphone brands in Pakistan:

The smartphones of Infinix have become popular for rendering quality products with excellent specs and features at an affordable cost, Because of this, it has witnessed growth in terms of value in the Pakistani market for the whole year. Its value rose from 11.6% in Q1 of 2020 to 27.6% in Q2 of 2020. Afterward, it witnessed a slight decline of 6.5 % in Q3 of 2020 then again increased a bit to 23.4% in Q4 of 2020. Even if you see the last four quarters, its value has remained constant without large fluctuations. Similarly, in terms of units, its share has also witnessed a similar trend, it increased in Q2 and witnessed a bit of decline in Q3 of 2020 and again jumped to 27.5% in Q4 of 2020.

The smartphones of Vivo are also popular in the Pakistani market. Due to this, they are also witnessing growth in terms of value in the recent era. Their market value of Vivo witnessed a positive trend except for Q2 in which it saw a decline. In the last two quarters, its share increased from 17.1 % in Q3 of 2020 to 22.2 % in Q4 of 2020. Similarly, in terms of units sold, a similar trend has been followed. The decline was only witnessed in Q2 of 2020 while in the last two quarters its share has increased from 15.3% in Q3 of 2020 to 20.2% in Q4 of 2020.

As Tecno and Infinix are subsidiaries of the same parent company, So the notion is the same, providing quality products at an affordable price. Therefore, its value has also not much fluctuated and seen a bit of decline in Q3 of 2020 after increasing in Q2 of 2020 as you can see in the above-mentioned graph. But again its value rose from 9.5 % in Q3 of 2020 to 14.3 % in Q4 of 2020. Simultaneously, in terms of units sold, its share has increased and seen a constant trend from 16.5 % in Q3 of 2020 to 19.0 % in Q4 of 2020.

iTel is making gradually evolving in the Pakistani market because of its budget price. In terms of units sold, its share has not much fluctuated. It has seen a bit of decline in the Q2 of 2020 but its share increased from 5.5% in Q3 of 2020 to 8.8% in Q4 of 2020.

Oppo is renowned for providing the best camera phones. It has been witnessing a rising trend in 2019 but this time around its share has been falling in all Q1, Q2, and Q3 quarters as you can see in the graph, and its share in terms of value has fallen to 10.4 % in Q4 of 2020.

Unfortunately, the tech giant Samsung has not been able to grasp a major portion of the market share. However, its share hasn’t witnessed many fluctuations both in terms of units and value. In terms of units, its share increased in Q1 of 2020 and decreased in Q2 of 2020 then increased to 8.6% in Q3 of 2020 and fallen again 8.0 % in Q4 of 2020. However, on the other side, in terms of value, it has witnessed a growth of 0.1 % in the last quarter and only seen a decline in Q2 of 2020.

The other smartphone brand share include Huawei, Xiaomi, Realme, Apple etc. These brands are also seeing a decline in the local smartphone market. In terms of units sold, their share has decreased significantly from Q1 of 2020 to Q4 of 2020. Similarly, in terms of value, their share has decreased from 25.6 % in Q1 of 2020 to 17.5 % in Q4 of 2020. The tech-giant Huawei due to the non-availability of Google service has literally vanished from the local market.


The afore-mentioned data is updated and taken from a very reliable source. If you have any queries regarding it, you can tell share them in the comment section!

Riaz Haq said...

Hammad hopes smartphones sector to be bigger from automobile industry

:Federal Minister for Industries and Production Hammad Azhar expressed the hope that smart phones manufacturing sector would prove to be even bigger from automobile industry in Pakistan and in next 10 years, its export revenues might be equal to country’s textile sector.

He was addressing as chief guest at the inaugural ceremony of Airlink Smartphone Assembly Line here at Quaid-i-Azam Industrial Estate Kot Lakhpat on Saturday.

Airlink Chairman Aslam Hayat Piracha, CEO Muzaffar Hayat Piracha and Engineering Development Board (EDB) Chairman Almas Hyder also spoke on the occasion, while Lahore Chamber of Commerce and Industry (LCCI) President Mian Tariq Misbah and a large number of businessmen and industrialists were also present.

Hammad Azhar said that effective and well-conceived industrial policies of the PTI government were now resulting into industrial revolution and robust economic growth.

He mentioned that when PTI came into government in 2018, around 70 to 80 per cent of smart phones sold in the local markets were smuggled lot. Curbing mobile phones’ smuggling was a herculean task, he continued, the government studied anti-smuggling strategies of other countries, and introduced DIRBS (Mobile Devices Identification, Registration and Blocking System) under which no mobile phone could be activated in Pakistan without clearing/paying all relevant duties and taxes.

“We have also removed all the reservations and apprehensions of the traders and all other stakeholders in this regard and due to effective policies of the government, there is no smuggled phone in the local markets and the government is collecting 60 to 70 billion rupees duty/tax from mobile phones. These measures also created ample space in the local market for the local manufacturers of smart phones,” he maintained.

Federal Minister added that government had also introduced Mobile Phones Manufacturing Policy-2020 and now five major players of this sector were setting up their manufacturing units in Pakistan.

“This is our landmark journey and now we are moving from local market towards export of smart phones,” he said and cited that Vietnam’s annual export revenues from mobile phones export stood at US $ 45 billion, which forms 25 per cent of its GDP.

Riaz Haq said...

Non-textile exports rise in 8MFY21

The exports of engineering goods went up 19.74pc and surgical instruments 4.92pc. In the engineering sector, the export of electric fans posted over 15pc growth followed by transport equipment 0.95pc and other electrical machinery 17.16pc respectively.

Riaz Haq said...

GST removal on locally-assembled units: Samsung, OPPO may start manufacturing cellphones

M/s Samsung and M/s OPPO are likely to start local assembly in Pakistan soon after removal of sales tax on locally assembled mobiles from above $ 200 category.

Mobile Device Manufacturing Policy 2020 was approved by the ECC in May 2020. The decision was subsequently ratified by the Cabinet on June 2, 2020.

The mobile device manufacturing policy provides sufficient advantage to the local manufacturing of mobile phones especially below $ 200 category in comparison with imports in completely built condition. M/s VIVO, M/s Airlink Communications, M/s Inovi Telecom are amongst the new investors in local assembly of mobile phones that have already started their trial production in February 2021.

The combined capacity of these three companies is more than 1 million mobile handsets per month whereas M/s Transsion Tecno, a Karachi based company assembling three famous brands including Itel, Infinix and Tecno , has increased local assembly from 150,000 units to 650,000 units per month owing to increase in demand soon after the policy was launched. In addition to the new entrants in mobile assembly, few experienced companies like G-Five and Q Mobile was already operating in the market, while M/s Samsung and OPPO are poised to enter local assembly in Pakistan market and are probably waiting for the implementation of approved recommendation of policy to remove sales tax on locally assembled mobiles from above $ 200 category. By introduction of new players and capacity enhancement by existing companies, Pakistan will soon be able to meet major portion of local demand, which was around 3.6 million per month in CY 2020.

The local manufacturing companies are moving rapidly from 2-G non android market to the 4-G smart phones as the local manufacturing has ensured availability of mobile handsets at competitive prices to customers.

Engineering Development Board (EDB), a technical arm of Ministry of Industries and Production (MoIP) was made the secretariat of Mobile Policy.

The policy has provisioned a 3 % export rebate for the local companies to enter into export market. From the initial success of the policy and increased demand in local and international market, the local assemblers are optimistic about export of locally assembled mobile phones.

The mobile phone manufacturing industry is expected to become larger than the automotive industry of Pakistan in terms of turnover in a few years and employment is expected to grow manifold. To further boost the electronics sector, work has already started on preparing appropriate framework for local assembly of tablets, allied equipment and mobile accessories in near future in line with its vision to improve the entire eco system, and make this the fastest growing sector in terms of employment and exports in the near future.

Riaz Haq said...

Smartphone manufacturing get a boost

Smartphone manufacturing policy was unveiled in March 2020. And by now there are commitments from a few players to assemble 1.5 million units a month – 18 million units per annum in a year’s time. Last week, Airlink did a launching ceremony of its factory situated in Lahore. The factory is following international standards and has a capacity to produce 500,000 units a month with a plan to ramp up the assembly to make 800,000 units each month by April 2021 in full three shifts. Based on seasonality and other demand factors, the company is geared up to produce 6 million units a year.

Apart of Airlink, another factory in Karachi has a capacity to produce 6 million units a year. These two factories are functional. Airlink was into the mobile phone distribution business and is now vertically integrated from assembling to retailing. The other company - Transsion Tecno has a long experience of manufacturing in automobile parts. Another player, Vivo has also bought land for factory in Faisalabad and is panning to produce 300,000 units a month. Yet another company Inovi Telecom’s claim is to assemble 200,000 units a month.

Combining all these, around 18 million units a year (1.5mn units a month) will be produced in Pakistan by 2022. Right now, the market size of smartphone is around 36 million units a year – mainly relying on imports. This market size has a potential to grow as a good chunk of consumers are on feature phones and these may slowly transit to smartphones. Plus, every year, there are around 2 million youth coming of age for smartphone use.

That is why Samsung and other players are thinking about starting to assemble in Pakistan. Samsung is big in Pakistan and is catering to high, middle, and low-end smartphones. In the low and medium size, the company must come in local assembling to remain viable – as per new policy, the smartphones under $200 price would not be viable to sell as imported units.

The existing two players (Airlink and Tecno) are contract manufacturers. Samsung is eying a partnership with a contract manufacturer in Pakistan. It is in talks with a few select groups in Pakistan for partnership including biggies like Nishat and Lucky. Samsung is also considering Airlink for partnership – the edge Airlink would have is its expertise in selling.

Smartphone assembling is a low capex and high working capital business. Airlink’s capex is around Rs600-700 million; but its working capital requirement is much bigger. If it sells at an average price of $60 per unit, for 500,000 units, it will be selling around Rs5 billion worth of phones a month. The WC need would be somewhere around Rs20 billion (considering three cycles a year). The company has arranged the working capital from bank credit lines; but is also planning to list on the stock exchange. This will be first of its kind listing on the PSX.

Riaz Haq said...

#Samsung plans #smartphone assembly in #Pakistan. Smartphone imports in Pakistan have swelled by 63% to $1.860 billion in 11MFY21 from $1.138bn in the same period last year. There are over 100 million #mobile #broadband subscribers. DAWN.COM

South Korean tech giant Samsung has been in talks with three investors for setting up a mobile manufacturing unit in Pakistan.

Sources said out of three parties, one has a franchise from Korea which has already set up vehicle assembling plants in Pakistan under Auto Development Policy (ADP) 2016-21, while other two are different parties.

They said so far no agreement has been signed as Samsung, after short listing various companies, is in the process of finalising its plan to award the licence to one of the companies for cellphone manufacturing.

The world’s biggest smartphone maker said in an earnings estimate on Wednesday that it expected operating profit of around 12.5 trillion won ($11 billion) for April to June, up from 8.15 trillion won a year earlier.

Companies being shortlisted for award of licence

“The Korean company aims to start local assembly of cellphones in the last quarter of this year,” a source, who is looking after the development in the mobile phone sector, told Dawn on Wednesday.

Market sources said Samsung may prefer the option to ink the agreement with one of the Korean companies operating in Pakistan owing to comfort level which it may not find with non-Korean firms.

The Engineering Development Board (EDB), an arm of the Ministry of Industries and Production (MoIP), approved Mobile Device Manufacturing Policy (MDMP) in 2020 and so far 21 companies have been given the green signal for mobile device manufacturing authorisation from March to June 2021.

As per EDB list, factories’ locations include Rawalpindi, Karachi, Lahore, Faisalabad and Islamabad. Some prominent brand names include Nokia, Oppo, Infinix, Tecno, Itel, Vivo, Alpha, Realme, VGOTEL, DCODE, Calme, Xcell, Spice, TCL, Alcatel, etc.

Sources said that the government has framed MDMP to encourage foreign players to take a plunge in Pakistan for setting up cellphone manufacturing unit. The aim is to produce the product under the banner of “Make in Pakistan” and to discourage imports.

Cellphone imports, as per figures of Pakistan Bureau of Statistics (PBS), have swelled by 63pc to $1.860 billion in 11MFY21 from $1.138bn in the same period last fiscal year.

According to the Economic Survey 2020-21, during July 2012 to February 2021, telecom sector has attracted over $3.9 billion of Foreign Direct Investment (FDI). The FDI in telecom during July-February FY21 was $101.1 million. Telecom operators have invested an amount of $363.9m during July-December FY21.

The main driver behind this investment is the cellular mobile sector which has invested $253.5m during the period. The overall investment in the telecom sector during the first eight months of FY21 crossed $465m. Pakistan’s cellphone subscribers have reached 183.48m till May 2021.

Riaz Haq said...

#China #tech-giant Xiaomi to Set up Local #smartphone assembly unit in #Pakistan. Xiaomi is following the footsteps of other major brands like Tecno, Infinix & Realme which have recently opened their local #manufacturing units in Pakistan. #mobilephones

In a landmark development, the Chinese tech giant Xiaomi has announced that it will set up a local assembly unit in the country in three to four months, according to sources. The latest development will not only generate employment opportunities for the indigenous people but will also boost the local smartphone manufacturing space in the country. Furthermore, the local manufacturing of smartphones will also attract foreign direct investment (FDI) and ramp up a foreign exchange through exports.

Tech-giant Xiaomi to Set up Local Assembly Unit in Pakistan: Source
Basically, Xiaomi is following the footsteps of other major brands like Tecno, Infinix, Realme, etc. who have recently announced to open their local manufacturing unit in Pakistan. It will greatly benefit the company as Xiaomi is currently one of the most loved brands in Pakistan. It can be evident if we look at the sale of its recently launched devices like Mi 11, Note 10, etc. The primary reason behind its huge demand is that it renders quality, consumer-centric (gaming phones, camera phones, etc.), and affordable products.

Furthermore, as we know that Xiaomi deals in a range of accessories and IoT products. So if the company’s smartphone local assembly becomes a success story then the company will surely install other product manufacturing assemblies as well.

Currently, Pakistan is the 7th largest importer of mobile phones with a humungous market size of over 40 million users. Thus, consequently, local manufacturing will also save foreign exchange on mobile phone imports.

Riaz Haq said...

Lucky Motor to produce of Samsung-branded mobile #smartphone in #Pakistan beginning in December 2021. Plant will be located at LMC’s existing plant facility producing vehicles at Bin Qasim Industrial Park, Special Economic Zone, Port Qasim, #Karachi.

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.

The notice added the production facility for producing Samsung mobile devices will be located at LMC’s existing plant facility producing vehicles at Bin Qasim Industrial Park, Special Economic Zone, Port Qasim, Karachi.

Secretary informs parliamentary panel: 'Samsung poised to enter local market; two firms short-listed'

“The production facility is anticipated to be completed by end of December 2021. That further information on the amount contemplated to be invested in the production facility and the capacity thereof shall be discussed between the Parties (Samsung and LMC) in due course of time.”

LMC is currently engaged in the business of manufacturing, assembly, marketing, distribution and sales of Kia and Peugeot branded vehicles, parts and accessories thereof, in Pakistan.

The development comes as a major landmark for Pakistan that has been pushing to join the league of smartphone manufacturing countries.

In a bid to boost Pakistan's telecom and manufacturing sector, some 21 new companies have been authorised to start local manufacturing/assembly of mobile phones.

Shahid H. said...

So, mobile industry is dying world over Lucky Group is going to bring second hand machinery to produce phone. They would over invoice the machinery will not pay the custom duty. Which is not corruption. Because Zardari is corrupt

Riaz Haq said...

Shahid: "So, mobile industry is dying world over Lucky Group is going to bring second hand machinery to produce phone. They would over invoice the machinery will not pay the custom duty. Which is not corruption. Because Zardari is corrupt"

Pakistan spent $2 billion on smartphone imports last fiscal year, and they're rapidly growing. I expect this import bill related to components and equipment for assembly to be significantly lower. Local assembly will also create jobs & grow exports

Riaz Haq said...

#China's Oppo to set up a dedicated assembly line in #Pakistan for Realme to produce #5G-enabled #smartphones and another for artificial intelligence (#AI) products at affordable rates. #Mobile #technology #Telecommunications #Internet #Broadband

Many smartphone companies have expressed their intention to begin production of mobile phones in Pakistan after cellular giant Samsung collaborated with the Lucky Group to produce high-quality phones in the country.

Now, the companies are making efforts to introduce 5G phones in the local market.

Chinese smartphone manufacturer Realme has shared plans to launch 5G-enabled phones in Pakistan at affordable prices after its parent announced the establishment of a local assembly line in the country.

Speaking to The Express Tribune, Realme Regional Marketing Director Sherry Dong said that the brand received an excellent reception in Pakistan, hence the company was now prioritising the country to introduce 5G mobile phones.

She added that the company was the first smartphone brand in Pakistan to sell over a million devices in less than a year, which was a significant milestone and paved the way for new investments and introduction of diverse products.

She announced that the company was planning to set up a local assembly line for its products after which top-notch technology would be available in Pakistan at affordable prices.

Read More: Why 5G is still out of Pakistan’s grasp

A few years ago, Realme’s parent company, Oppo Mobile Telecommunications Ltd, had expressed its interest in setting up a mobile assembly plant in Pakistan.

Giving further details, she said that the facility would have two separate assembly lines - one for each brand.

With a dedicated assembly line for Realme, the company will introduce 5G-enabled mobiles as well as other artificial intelligence (AI) products at affordable rates.

“5G is the future, therefore, we have to provide up-to-date technological products to Pakistani consumers at affordable prices,” she added.

The company utilises online marketplaces to promote its products because e-commerce has grown significantly in Pakistan due to the Covid-19 pandemic.

Keeping this in view, the management of the smartphone company has decided to introduce its own digital store in Pakistan’s online marketplace.

“We entered into partnerships with a couple of local companies to sell our products, but now we have decided to establish our own digital outlet in Pakistan,” she said.

Sherry added that digital platforms in Pakistan had matured over the past couple of years, but they still lagged behind regional countries.

She pointed out that the company faced some issues with Pakistan Customs as delay in release of shipments had caused shortage of its products.

Riaz Haq said...

Samsung's building a TV assembly plant in #Pakistan to churn out 50,000 units yearly. Samsung Electronics is also establishing a new #smartphone #manufacturing line in the country.- SamMobile

Samsung Electronics is building a new TV manufacturing plant in Pakistan. The project will be finalized in collaboration with R&R Industries, and the factory is scheduled to become functional in the final quarter of the year. The news was confirmed via Twitter by the Advisor to the Prime Minister of Pakistan, Abdul Razak Dawood.

According to the news, the building of Samsung’s new TV manufacturing plant was made possible in part by the Made-in-Pakistan policy, which provides incentives to bolster the domestic manufacturing industry.

Through its new TV factory in Pakistan, Samsung will be able to produce roughly 50,000 units every year, though it’s not clear what TV models will be made there, exactly.

Samsung will also build phones in Pakistan
Aside from the new TV manufacturing plant built in collaboration with R&R Industries, Samsung Electronics is also establishing a new mobile phone manufacturing line in the country.

This was announced by Lucky Motor Corporation a couple of months ago, the latter of which will repurpose its automotive plant at Port Qasim to assemble Samsung mobile devices. By 2022, 80% of all mobile phones sold in Pakistan could be manufactured locally, though not exclusively at the Port Qasim assembly plant.

Riaz Haq said...

OPPO #Pakistan targets 5mln #mobilephone exports. The #Chinese company has plans to upgrade its assembly plant to a #manufacturing plant in Pakistan with a target to make 5 million mobile phones per annum. #smartphone

OPPO Pakistan has plans to upgrade its assembly plant to a manufacturing plant in Pakistan with a target to make 5 million mobile phones per annum.

OPPO Pakistan CEO George Long made the announcement during his meeting with Federal Minister for Industries and Production Makhdum Khusro Bakhtyar at his office on Wednesday.

Highlighting that the company also aimed to establish a research and development centre for transfer of technology and skill development of IT professionals in Pakistan, Long said OPPO was optimistic about exporting locally manufactured sets from the country.

Welcoming the announcement, the minister said that the government of Pakistan’s investment-friendly policies have improved the business ecosystem in Pakistan.

He said that local manufacturing of mobile would not only keep prices under control for local customers, but would also enable expansion of the mobile phone industry to become a bigger player in the economy. Bakhtyar said that this growth would result in the creation of numerous employment opportunities within the industry as well as associated industries in the country.

Earlier this month, the Pakistan Telecommunication Authority (PTA) had floated the draft ‘Mobile Device Manufacturing Regulations and Authorisation’ for the promotion of domestic manufacturing of mobile phones.

Riaz Haq said...

#Pakistan plans to export #smartphones in 2022. Pak produced 22.12 million handsets during January-November 2021 and imported 9.95 million. The country's #Mobile Device #Manufacturing Policy 2020 set a 49% localization target by June 2023. #economy

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.”

Riaz Haq said...

#Pakistan businessman hints at #iPhone plant in the country. Local #manufacturing could reduce import tariffs to make its best iPhones more affordable and accessible in the country. #Apple saves around 22% on import duties by making its phones in #India

Pakistan business leader Javed Afridi says he is in talks with Apple to bring an iPhone assembly plant to the country.

Afridi made the revelation on Twitter in response to a question from journalist Shiffa Yousafzai:

Afridi is best known as the owner of Pakistan's MG JW Automobile, and the CEO of Haier & Ruba. He is also the chairman and owner of Pakistani T20 cricket franchise Peshawar Zalmi. Haier is a leading Pakistani supplier of home appliances and tech including laptops and LED TVs.

The murmurings could be reminiscent of a similar deal Apple did in India in order to onshore iPhone assembly in the country there. Like India, iPhones and other Apple products sold in Pakistan are subject to high import tariffs if they aren't made locally, driving up the price.

If Apple was able to set up some form of manufacturing it could reduce the impact of these tariffs to make its best iPhones more affordable and accessible in the country. Apple saves around 22% on import duties by making its phones in India instead of importing them. It would also help Apple reduce its reliance on its supply chain in China, a weakness highlighted by the pandemic which saw heavy disruption to supply in the early part of 2020. Like India, Apple could also consider using phones made in Pakistan for export as well as the local market.

Apple announced its new iPhone SE earlier this week, featuring 5G and the A15 chip from the iPhone 13, a great budget option at just $429.

Riaz Haq said...

It’s an era of mobile phone and telecom technologies. With its ever-increasing demand, the mobile phone has already become a basic need for almost every person. Especially, after the COVID-19 pandemic, when the lockdown was imposed and the most convenient way to connect with others or perform our daily tasks was through the mobile phones, the demand for this gadget and related applications reached its maximum level. During the pandemic, the overall data usage also increased which in return, helped the telecom companies to gather more revenue hence contributing to the positive growth of the IT and telecom sector.

Pakistan itself has seen tremendous growth in the IT and telecom sectors over the past few years. No doubt, the inception of 3G/4G services in Pakistan has opened new avenues of growth and innovation in the country. With 191 million cellular subscribers, teledensity has reached 86.71% whereas, 3G/4G penetration stands at 49.94%. . According to the Pakistan Bureau of Statistics (PBS), Pakistan’s mobile imports witnessed an increase of 7.63 per cent in the first eight months from (July-February) the current fiscal year by reaching the value of $1311.493 million to $1,411.619 million.

So far, the establishment of local manufacturing plants has brought an investment of over $126 million to the country
To boost the telecom sector, the Government approved the local mobile phone manufacturing policy back in 2020. Pakistan Telecommunication Authority (PTA) in light of the policy issued Mobile Device Manufacturing (MDM) Regulations on January 28, 2021.

PTA has issued MDM authorization to 30 companies enabling them to manufacture mobile devices in Pakistan. The establishment of these manufacturing plants has brought an investment of over $126 million.

The Mobile Device Manufacturing Policy 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. As soon as the companies started manufacturing the mobile devices in the country, the mobile phone manufacturing industry saw significant growth in revenues and an affirmative decline in imports.

With a more than 200 million population and the ever-increasing sustainable demand for technology, Pakistan has become a very promising market for the IT and Telecom industry
According to the data revealed by PTA, Pakistan produced 24.66 million handsets in 2021. It is up from 13.05 million in the calendar year 2020, representing an 88 per cent increase. Moreover, the 4G assembled smartphones reached 10.06 million in 2021.

However, commercial imports reached 10.26 million in 2021. However, the local manufacturing plants have manufactured/assembled 1.53 million mobile phones including 0.86 million 2G and 0.67 million smartphones in January 2022.

The increase in local manufacturing has resulted in a decline in the imports of mobile phones. According to PBS, the imports of mobile phones decreased by 21.45 per cent in February 2022 as compared to the previous month of January.

As a result of the Mobile Phone Manufacturing Policy, which contains duty incentives for enhancing mobile phone assembling in Pakistan, the majority of phones cheaper than $200, are now assembled in Pakistan.

To achieve this milestone, various Chinese mobile phone manufacturers have played a key role. According to PTA, till November 2021, Itel topped the list by producing 3.91 million mobile devices followed by VGO Tel at 2.97 million, Infinix at 2.65 million Vivo at 2.45 million, Tecno at 1.87 million, QQMEE at 0.86 million, and Oppo 0.67 million. But these are not the only ones.

Riaz Haq said...

Samsung has also officially started manufacturing smartphones in Pakistan. The company is hoping to manufacture around 3million devices per year in the country. Similarly, 2.5 to 3 million sets of Xiaomi would be produced per year in Pakistan in collaboration with Airlink Communication.

The import of manufactured or Completely Built Units (CBU) is on the decline while that of mobile phone components (CKD) is on the rise. From July-November 2021, the import of CBU decreased by 73% to USD$ 179 million as compared to USD 661 million during the same period last year. This saved USD$ 410 million in foreign exchange. In contrast, the import of mobile phone components for local assembly increased by 407% to USD$ 674 million from USD 133 million last year.

The successful implementation of the Device Identification Registration and Blocking System (DIRBS) along with conducive government policies including the mobile manufacturing policy has created a favourable environment for mobile device manufacturing in Pakistan. It has also contributed positively to the mobile ecosystem of Pakistan by eliminating the counterfeit device market while providing a level playing field for commercial entities and has created trust amongst consumers due to the formulation of standardized legal channels for all sorts of device imports.

Local mobile phone manufacturing has not only helped the telecom sector by increasing its revenue growth. But it also helped the country in many different ways. For instance, the local manufacturing industry had created almost 50,000 jobs already. Samsung aims to use labour-power for the manufacturing of mobile phones instead of machines which in return will produce millions of jobs for unemployed people of the country. It is also estimated that by increasing localization, production, and exports around 200,000 to half-million jobs in the country would have been created.

According to PTA, only 53% of the population of the country is using smartphones. The remaining 47% population is still using 2G devices. This also indicates that Pakistan is still lagging behind in the 5G race. As per GSMA, this number is still low and by 2025, 74% of the population of Pakistan will be able to use smartphones. One of the main reasons for this is the high mobile prices. The lower class does not have the capacity to buy expensive or even midrange phones. The local mobile manufacturing will definitely lower the mobile prices and the availability of cheaper phones will increase which in return, will increase the smartphone penetration in the country. If the mobile manufacturing industry keeps on going at this pace, in the near future, internet penetration
will also increase. Hence, the whole digitalization process will speed up.

Although, the mobile phone manufacturing industry is playing a good job of aggregating revenue growth. But there are still many ways to boost this growth. According to PBS, during the first five months of the fiscal year 2021-22, Pakistan earned $1051.050 million by offering various information technology IT services exports to other countries. Whereas, in August 2021, Pakistan has exported 5,500 units of 4G smartphones carrying the “manufactured in Pakistan” tag to the United Arab Emirates (UAE). Although it was a big achievement for the country, the number of exported devices is still very low. If the companies managed to increase this number, the revenue growth will also increase.

The government has plans to export the locally assembled phones to the markets like Africa, Central Asian Republics, and Afghanistan. It is a good initiative because Pakistan is currently manufacturing low-end mobile phones and it will be appropriate to export the phones to those countries that are preferably using the low-end phones.

Riaz Haq said...

Despite local manufacturing of mobile phones, the import bill is rising. The reason behind this is the import of high-end phones priced above $1000, a market segment that is not being manufactured in Pakistan currently. . The PBS data says that mobile phones worth $1.41 billion were imported during the first eight months (July-February) of the current fiscal year as compared to $1.31 billion during the same period of last year, registering a growth of 7.63 per cent. So, if the country starts producing high-end smartphones, the import bill will decline.

The current government has proposed the Finance bill 2021-22 recently which indicates a great tax hike. In the new bill, the government has restored the 17 per cent sales tax on computer and IT equipment imports. Mobile phones worth more than $200 that are imported in CBU condition are also subject to a 17 per cent sales tax.

Although this increase in taxation is uncalled for it creates an opportunity for local manufacturers as high taxation discourages imports. Therefore, when the devices are manufactured locally, there will be no tax and the prices of the phones will automatically drop and people will prefer locally manufactured phones instead of imported ones.

The lack of a component ecosystem is also a hurdle in the way of boosting the manufacturing industry in the country. Many electronic and non-electronic components are required to make a smartphone. Each phone needs component parts and many of the manufacturers of these parts already have deals with other brands. It is currently difficult to manufacture the phone from scratch. The assemblers are importing mobiles in semi-knocked down (SKD) condition, which are then assembled in Pakistan.

It’s not only the local production of cellphones but also a host of opportunities that it brings. From employment to investment and from export opportunities to local capacity building, it carries immense potential. If the growth rate keeps on increasing at this pace, in no time, Pakistan will be considered one of the leading smartphone manufacturing hubs just like China and India. This will attract foreign investment, save foreign exchange on mobile phone imports, earn foreign exchange via exports and create job opportunities for local people.

Riaz Haq said...

Pakistan has exported its first vehicle – made by Master Changan Motors – under the new Auto Industry Development and Export Policy (AIDEP 2021-26), according to a press release issued by the company on Thursday.

The press release stated that under the new auto policy, all OEMs would require to initiate vehicle exports to help develop the local industry and expand the export capability of the country. The Changan Oshan X7, which is the country’s first export unit under the new policy, is the first vehicle to be launched through a global RHD premiere earlier in March 2022.

Pakistan is the only country outside of China to produce the latest model of Changan Oshan X7.

The press release quoted the company's CEO Danial Malik in a ceremony in Karachi, “We are delighted and proud to lead Pakistan into a new chapter for the auto industry and make its mark on a global level”.

“The Changan Oshan X7 is the first of many more vehicles to be exported under our vision to stay Future Forward, Forever and the Auto Industry Development and Export Policy (AIDEP 2021-26)”, he added.

The company further added that Pakistan is Changan’s first and only RHD manufacturing base and is helping the brand expand globally.

It added that the state-of-the-art plant was completed in a record time of just 13 months and now has the capacity to produce 50,000 vehicles annually.

“Master Changan is our first RHD production base and we are very happy to export our RHD Oshan X7 SUV from Pakistan”, Steven Zhao – Vice CEO Master Changan Motors Limited stated.

Riaz Haq said...

Can #Pakistan become the next #tech #manufacturing hub? #Samsung is now assembling all its top #smartphones, except for the foldable Z-Series, in Pakistan. Pak can save some of over $2 billion spent on #mobile #phone imports last year.#technology @TRTWorld

A number of smartphone companies, including Samsung, have set up assembly plants in Pakistan in the past year. But this nascent industry is facing local challenges.
Along a dusty pot-holed road in Korangi industrial estate, one of Karachi’s designated factory zones, sewage runs in open drains, rag pickers collect plastic bottles, and car mechanics sweat at makeshift workshops.

It’s a June day with a temperature topping 35 degrees Celsius. Tempers flare up easily. Trucks loaded with textiles and chemicals zoom past, leaving a cloud of dust in their wake.

Incessant and prolonged electricity breakdowns mean many factory workers are sleep-deprived. Few can afford to lose daily wages in Pakistan, where the government struggles to bring in much-needed foreign investment to stabilise its fragile economy.

But amid this chaos, men and women donning blue and pink coats and special slippers walk through a passageway of one of the factories where a ventilation system blows dust specks off their clothes before they enter a long corridor flanked by different workstations. This is where Premier Code, a Pakistani company, manufactures smartphones.

“We need to be very careful about the environment in which we work. Karachi’s weather is different. There’s a lot of dust. So we make sure everything is clean. Our workers are not even allowed to bring water bottles where the phones are assembled,” says Nauman Amjad, the factory manager.

“We import parts from China and then assemble them here. But we have our own SOPs (Standard Operating Procedures), which employees follow to put the components together,” he tells TRT World.

Workers skillfully attach charging jacks and cameras to the motherboard as the phones — known as Dcode in the market — move along the assembly line. Plumes of cold air seep out of air humidifiers placed at various workstations.

Just a few years back, all mobile phones in Pakistan were imported. That changed two years ago when the then-government introduced a policy incentivising local assembly of the phones via tax rebates and other measures.

In 2021, local manufacturers produced 24.66 million handsets and imports drastically decreased, according to the Pakistan Telecommunication Authority (PTA), the industry regulator.

Samsung, the world’s largest smartphone maker, now assembles all its top brands, except for the foldable Z-Series, locally.

Local manufacturing and contract assembly mean Islamabad can slow the drain on its foreign exchange reserves. Pakistanis spent more than $2 billion on importing cell phones last year.

A high import bill and debt repayments have depleted official coffers and forced policymakers to try and negotiate a loan with the IMF.

With more than 114 million 3G and 4G subscribers, Pakistan has a large young population hooked on apps like TikTok and PUBG, which has increased the demand for smartphones.

Imposition of high tax on the import of mobile phone sets and tax rebates for local assembly has encouraged investment, according to industry professionals.

The PTA has issued licences to more than two dozen companies to assemble phones for the domestic market.

Contract manufacturing, wherein large brands such China’s Xiaomi outsource the assembly of phones to companies in countries like Vietnam, is not new.

Vietnam has emerged as one of the leading countries in the assembly and export of smartphones and other tech products in the past decade.

Apple recently moved part of its iPad manufacturing to Vietnam from China, where Covid lockdowns have disrupted supply chains.

Riaz Haq said...

In Pakistan, Samsung’s local outsourcing contractor is Lucky Motors, which assembles KIA cars and is part of a large business conglomerate.

“It’s only in the last five to seven years that the smartphone business has mushroomed in developing countries like ours,” says Quentin D’Silva, the head of Lucky's smartphone division, adding that smartphone usage has surged in the country following the introduction of 3G and 4G cellular services in 2014.

A matter of training

When D’Silva was helping set up the assembly unit in Bin Qasim, a special economic zone on the fringes of Karachi, he and his team had to follow Samsung's strict guidelines to uphold its manufacturing standards.

“My production manager, who worked for Reckitt Benckiser, visited a Samsung facility in Indonesia and he tells me they run it like a pharmaceutical company,” where extreme hygiene and cleanliness standards are maintained, he says.

A smartphone like Samsung’s S22 comprises thousands of intricate components such as chipsets designed and manufactured at sophisticated facilities in South Korea and a handful of other countries.

Putting the components together is the relatively easy part. Workers can be trained over a few weeks to follow the SOPs of Apple or Samsung correctly. Motor skills and speed are built gradually over time.

A bigger challenge in a country like Pakistan was changing the mindset of the nearly 700 people the company employs, says D’Silva.

“I’m not going to oversimplify the assembly part. But the training starts off with the concept of quality,” he asserts.

Customer satisfaction is a top priority for the South Korean tech giant and that means workers need to make sure the finished product is packed neatly without even a bubble of air or a speck of dust on its wrapping, he notes.

Samsung started production in Pakistan late last year and between January and May, 2022, it produced 1.2 million smartphones, including the S22 Ultra, the latest in the series.

Depending on the model, it takes workers between 13 and 18 seconds to put together a Samsung phone as it moves along an assembly line, according to D’Silva

"Our production drops if, for instance, our workers go for lunch and are 10 minutes late. That’s where the discipline comes in.”

Moving beyond

Mobile phone assembly in Pakistan picked up its pace two years ago when the government increased taxes on smartphone imports. Simultaneously, the local industry was encouraged to import spare parts and assemble them domestically for the local market.

More recently, mobile phone imports have been banned as Islamabad tries to halt the rupee depreciation — one of the consequences of imports outweighing the revenue from exports.

Contract manufacturing generates employment and cuts down imports. But some local companies want to create brands and design their own products in the long run.

Premier Code says it’s investing approximately two to four percent of its revenue on research and development to gear up for the future.

“It’s not possible to localise production of all the components. Only a handful of companies make LCDs (the screens). Chipset manufacturing is primarily done in Taiwan, South Korea, Japan, the US and to a lesser extent in China,” says Muhammad Naqi, Premier Code’s CEO.

His company focuses on the design side of things, such as the layout of the printed circuit boards (PCBs), investing in proprietary software and the exterior look of the phones.

At the company’s factory, Dcode mobiles are subject to strict testing. Random samples are picked from each finished batch to undergo a durability test, which includes dropping spherical metal balls onto the phone’s screen and then dropping the device on the marble floor.

Naqi says his company is not a contract manufacturer. “We want to develop our own brand and products at the same time” — even if the components are shipped from elsewhere.

Riaz Haq said...

Pakistani companies have been building PCBs — the green-coloured boards on which chips and resistors are mounted — for years for appliances such as televisions and air conditioners.

“But you need to understand that their layout is really big. When it comes to smartphones, it's a very small layout, which requires precision engineering. Our machines are not able to do that,” says Naqi.

High-tech machines used for making PCBs for mobile phones will mean higher capital costs and a thin factory workforce — undermining a vital goal of the government's policy, which is to create employment.

Nevertheless, a few tech companies are trying to challenge that view. One of them is located not far from Premier Code’s facility.

All about small steps

Elite Lighting manufactures parts for LED lights. Their products are nowhere close to the technologically advanced components that smartphone manufacturing requires.

But Yousuf Farooq, a young director at the company, has big dreams.

“Pakistan imports 100 million LED lights annually. It’s a huge market that we can capture,” he says.

Founded in November 2020, the company designs and fabricates PCBs for things like LED lights, watches and circuits that go into petrol pump dispensers.

“People were importing LED parts and putting them together here. We said, “Why don’t we build them here?”

At his 50-employee factory, workers place blue and black cylindrical components on the PCBs and solder them together. Known as ‘through-hole components’ such as resistors and capacitors, they are mostly imported from China.

But Farooq says his company can make them locally as the company grows and more orders come in.

“We started off by placing 9,000 components an hour on the PCBs. Now we can place 25,000 components. Almost all our workers were unskilled. We trained them over a period of 6 months.”

The Pakistani rupee’s depreciation, which has involved a 30 percent loss against the US dollar since July 2021, has made it feasible for local manufacturers to compete with importers.

LED light sellers pay their Chinese suppliers 60 to 90 days before the shipments arrive, says Farooq.

“Imagine if we can deliver the same product in 15 days and we deal in cash. So what has happened is that it improves the cash cycle of our customers.”

“Our customer can also just walk into my office and talk to me if something goes wrong. He doesn’t have to worry about learning Chinese,” he chuckles.

Rising wages in China have also made local manufacturers competitive. On average, Lucky and Premier pay between Rs30,00 and Rs35,000 (around $165) a month to their workers.

But the nascent industry is already facing a crisis. In recent weeks, banks have refused to extend credit which companies need to import components. That’s because of the fast-depleting foreign currency reserves that Islamabad is trying to preserve.

Lucky Motors, Samsung’s contract assembler, hasn’t been able to manufacture a single phone in almost a month.

“To say that Samsung people are upset is going to be an understatement,” says D’Silva, the CEO.

Riaz Haq said...

Pakistan’s Mobile Imports Decline by 4% to $1.9 Billion in FY22

Pakistan imported mobile phones worth $1.978 billion during the fiscal year 2021–22 compared to $2.065 billion during the same period last year, registering a negative growth of 4.19 percent, according to the Pakistan Bureau of Statistics (PBS).

The overall telecom imports into the country during the period under review, i.e., fiscal year 2021–22, increased by 3.52 percent by going up from $2.593 billion in June–July 2020–21 to $2.684 billion during the same period last year.

On a month-on-month basis, imports of mobile phones into Pakistan decreased by 76.52 percent during June 2022 and stood at $32.221 million when compared to $137.213 million imported in May 2022, according to the PBS data.

Furthermore, on a year-on-year basis, mobile phones witnessed an 84.26 percent negative growth when compared to $204.677 million in June 2021.

On a month-on-month basis, the overall telecom imports into the country decreased by 52.80 percent during June 2022 and stood at $86.843 million, when compared to the imports of $183.985 million in May 2022.

Likewise, on a year-on-year basis, overall telecom imports witnessed 66.11 percent negative growth when compared to $256.255 million in June 2021. Other apparatus imports during July-June 2021-22 increased by 33.65 percent and stood at $705.945 million compared to $528.190 million in July-June 2020-21.

Other apparatus imports registered 16.78 percent growth on a month-on-month basis and stood at $54.622 million in June 2022 compared to $46.772 million in May 2022 and registered 5.90 percent growth when compared to $51.578 million in June 2022.

Riaz Haq said...

From Imports To Exports – An Achievement Of Mobile Phone Industry


Pakistan’s mobile phone industry showed an achievement.
Handsets production increased with implementing new mobile phone manufacturing policy(2020) and efficient implementation of DIRBS.
Due to investments/incentives, the country has managed to become an exporter of 4 G handsets.
Correspondingly, being an exporter, there will be a boost in the digital economy through providing mobile services particularly in the form of mobile broadband and hence; enhancing export revenue, digital connectivity, ecosystem & innovation.
The handset manufacturers are determined to meet the challenge of localization, production, and exports which will not only create jobs in the country but will improve export competitiveness.

Introducing policies and efficient DIRBS has restored investors’ confidence to invest in Pakistan. A sustainability should be made to keep DIRBS running effectively.
Pakistan must keep interacting with new investor/firms and offer policy incentives (whenever needed) to let them stay in the market.
Pakistan needs to set production and export target for mobile phones in comming years.
Domestic market of mobile phones needs to be established by some incentives, & ease of doing business. Any necessary policy change must be timely introduced to get full benefit out of it.
For Mobile phone manufacturing, proper value chain needs to be developed.
Concluding Remarks:
Pakistan’s mobile phone manufacturing industry has shown its potential to increase domestic production of handsets, after implementation of new Mobile Devise Manufacturing Policy (2020) and Devise Identification Registration and Blocking System. Through new investments/incentives and DIRBS the country has managed to create favorable business environment and hence Pakistan become an exporter. This encouraging development will promote the exports of handsets in future. Correspondingly, being an exporter, there will be a boost in the digital economy through providing mobile services particularly in the form of mobile broadband and hence; enhancing export revenue, digital connectivity, ecosystem & innovation. The handset manufacturers are determined to meet the policy challenges of localization, production, and exports which will not only create jobs in the country but will improve export competitiveness. Introducing successful policies and efficient DIRBS has restored investors’ confidence to invest in Pakistan.

It is recommended that Pakistan must keep interacting with new mobile phone manufacturing investor/firms and offer policy incentives (whenever needed) to let them stay in the market. Domestic market of mobile phones needs to be established by provision of facilities incentives, investment & ease of doing business. Any necessary policy change must be timely introduced to get full benefit out of it. For handset manufacturing, proper value chain needs to be developed. A sustainability should be made to keep DIRBS running effectively.

Riaz Haq said...

PTA confirms 14 Million mobile phones manufactured locally during Jan-Jun 2022

According to the Pakistan Telecommunication Authority, 14.08 million mobile phones manufactured during the first six months (January-June) of 2022, compared to 1.14 million imported commercially (PTA).

In June 2022, local manufacturing plants produced/assembled 1.67 million mobile phone devices. Local manufacturing facilities produced 24.66 million mobile phone handsets in calendar year 2021, up from 13.05 million in 2020, representing an 88 percent increase. According to PTA data, commercial imports of mobile phone handsets rose at 10.26 million in 2021, up from 24.51 million in 2020.

The 14.08 million mobile phones manufactured/assembled domestically include 8.06 million 2G and 6.02 million smartphones. According to PTA data, 54 percent of mobile devices in Pakistan are smartphones, while 46 percent are 2G.Overall telecom imports into the country surged by 3.52 percent over the time under evaluation, from $2.593 billion in July-June 2020-21 to $2.684 billion during the same period last year.

The effective implementation of the Device Identification Registration and Blocking System (DIRBS), in conjunction with supportive government regulations, such as the mobile manufacturing policy, has provided a favorable climate for mobile device manufacture in Pakistan.

It has also benefited Pakistan’s mobile ecosystem by minimizing the bogus device market, creating a fair playing field for commercial organizations, and building consumer trust through the development of standardized legal routes for all types of device imports.

Riaz Haq said...

The cumulative market share of the six major players (in mica tape insulation) is near about 40%. These market players are involved in collaborations, mergers & acquisitions, and new product launches to strengthen their market presence. For instance, in May 2021, Mica Corporation expanded its global distribution network to support growth factors in Pakistan. The company extended its market presence through this development.

Astute Analytica released a new research report on the global Mica Tape for Insulation Market. The global market study looks into a variety of subjects, such as opportunities, market size, development, innovation, sales, and the overall growth of top players.

The global mica tape for insulation market held a market value of US$ 167.2 Million in 2021 and is forecasted to reach US$ 200.1 Million by the year 2027. The market is expected to register a CAGR of 3% during the forecast period.

The study incorporates both qualitative and quantitative data and draws on both primary and secondary statistical sources. Significant companies, important market categories, and a range of products are included in the global market report. In addition, the report covers the measurement years and the study points.

Growth Influencers:

Increasing application of mica electrical insulation in consumer electronics

Mica tape is quite commonly used in everyday appliances and consumer electronics. Since the product is very easy to shape, it is apt for mass production of components. This also allows electronic manufacturers to ensure meeting the strict safety standards, associated with consumer electronics. Furthermore, mica tape’s versatility is also suited for small form factors, which is required, as demand for greater performance in consumer electronics needs to be balanced with considerations regarding weight, design, and size.

Favorable government initiatives to promote the semiconductor industry

Various government initiatives to develop the semiconductor industry are expected to drive market growth. For instance, in the Union Budget of 2017-18, the government of India increased the allocation for incentive schemes, such as the Modified Special Incentive Package Scheme (M-SIPS) and the Electronic Department Fund (EDF), to USD 111 million. To ensure further investments, reduce dependence on imports, and create employment opportunities, the government amended the M-SIPS in 2020 and approved new incentives for investors, worth USD 1.47 billion. Such initiatives by government organizations to boost the semiconductor industry are expected to drive the market growth of mica tape for the insulation market.

Riaz Haq said...

Pakistan Exports 120,000 Locally Manufactured Mobile Phones

The export ceremony of locally manufactured mobile phones by Pakistan Telecommunication Authority (PTA) Authorization holder Inovi Telecom was held at PTA headquarters today.

The ceremony was held to mark Inovi’s achievement of the export of 120,000 locally made mobile phones of the SEGO brand to the United Arab Emirates for African markets.

Inovi Telecom is the first company to export locally manufactured mobile phones in large quantities. Inovi’s CEO appreciated PTA for its active support and for taking measures to help bolster the mobile industry. Moreover, both PTA Members extended their continued support for the development of a mobile device manufacturing ecosystem in Pakistan.

Inovi Telecom Pvt. Ltd was issued Mobile Device Manufacturing Authorization on 9th April 2021 in accordance with the PTA Mobile Device Manufacturing (MDM) Regulations, 2021.

Riaz Haq said...

Both FoxConn and Wistron assembling iPhones in India are Taiwanese companies. Almost all of the components are imported. Local value addition in India is about 10%.

Riaz Haq said...

iPhone Exports from India Double to Surpass $2.5 Billion

Foxconn Technology Group and Wistron Corp. have each shipped more than $1 billion of Apple’s marquee devices abroad in the first nine months of the fiscal year ending March 2023, people familiar with the matter said. Pegatron Corp., another major contract manufacturer for Apple, is on track to move about $500 million of the gadgets overseas by the end of January, the people said, asking not to be identified revealing private information.

Apple’s rapidly growing export numbers illustrate how it is ramping up operations outside of China, where chaos at Foxconn’s main plant in Zhengzhou exposed vulnerabilities in the Cupertino-headquartered company’s supply chain and forced it to trim output estimates. That compounded a broader problem with evaporating demand for electronics as consumers weigh the risks of a global recession.

Apple, the world’s most valuable company, began assembling its latest iPhone models in India only last year, a significant break from its practice of reserving much of that for giant Chinese factories run by its main Taiwanese assemblers including Foxconn.

While India makes up just a fraction of iPhone output, rising exports bode well for Prime Minister Narendra Modi’s plan to make the country an alternative to China as factory to the world.

China’s Covid Zero policies and an episode of violence at the Zhengzhou plant — nicknamed iPhone City as the world’s biggest production center for the device — laid bare the dangers of relying on the country. While Beijing has since dropped that approach to containing the virus, Apple and other global names are exploring alternative locations more than ever before.

India’s vast workforce, Modi’s support and a thriving local market make it a prime candidate to take on more electronics manufacturing. Foxconn, Apple’s largest supplier, began building facilities in the country more than five years ago in anticipation of a need to extend its geographic range.

One recent selling point is a raft of new government incentives, a cornerstone of Modi’s drive to make India an electronics manufacturing hub. Foxconn has won 3.6 billion rupees ($44 million) of benefits in the first year of the so-called production-linked incentives scheme, while Wistron’s claims are currently being processed, the people said.

Representatives for Apple, Foxconn and Wistron didn’t respond to emails seeking comment. A Pegatron spokesperson declined to comment.

Apple’s contract manufacturers currently make iPhones at plants in southern India. But production in the country is just beginning. About 3 million of the devices were made in India in 2021, compared with 230 million in China, according to Bloomberg Intelligence estimates.

Foxconn began making the iPhone 14 in India a few months ago — sooner than anticipated — after a surprisingly smooth production rollout that slashed the lag between Chinese and Indian output from months to mere weeks. Apple’s three Taiwanese partners currently assemble iPhones 11 to 14 in India.

But moving out of China, where Apple has built a deep supply chain for close to two decades, isn’t easy. A Bloomberg Intelligence analysis estimated it would take about eight years to move just 10% of Apple’s production capacity out of China, where roughly 98% of the company’s iPhones are being made.

India tracks production and exports of all smartphone makers who enjoy financial incentives as part of Modi’s push.

Beyond smartphones, the country is drawing up plans to boost financial incentives for tablet and laptop makers, hoping to woo Apple to make everything from earphones to MacBooks locally as well as attract other brands. The iPhone maker is also expected to open its first retail store in India in 2023, after meeting certain criteria imposed on foreign retailers.

Riaz Haq said...

Mobile policy attracts 36 companies to manufacture smartphones in the country

Like the auto industry in Pakistan, the mobile phone industry has also attracted at least 36 companies to manufacture/assemble smartphones under the policies introduced by the government in 2020.

According to officials, the ‘Make in Pakistan’ policy introduced by the previous Imran Khan government has resulted in the establishment of 31 companies which manufacture a great number of renowned international mobile phone brands in the country.

As per the data, local manufacturing plants have manufactured over 19.7 million phone handsets during the first 11 months of 2022 compared to just 1.37 million commercially imported phone handsets. Data provided by the Pakistan Telecommunication Authority (PTA) reveals that the local manufacturing plants assembled 1.56 million mobile phone handsets in November 2022

Despite the increase in local production, the country imported mobile phones worth $ 290.57 million during the first five months (July-November) of the current fiscal year 2022-23. However, this was a decrease of 66.08 percent when compared to the imports of the same period last year at $ 856.73 million.

To review further expansion and issues related to the newly flourishing industry, the Ministry of Industries & Production (MoI&P) will hold a mobile device manufacturing summit on Tuesday (today). As per the officials of the Engineering Development Board (EDB), the relevant department of the MoI&P is jointly organising the summit in collaboration with the Pakistan Mobile Phone Manufacturers Association.

The summit will be addressed by the Federal Minister for Board of Investment, Chaudhry Salik Hussain, and will also include an exhibition of technology and products by the members of association including Xiaomi, Realmi, Infinix, Tecno, Itel, Alcatel, G-Five, Oppo, Vivo, Premier Code etc. The exhibition will be open for targeted general public.

According to officials, the purpose of organising this summit-cum-exhibition is to get input from all the relevant stakeholders which includes mobile device manufacturers, government officials from MoI&P, PTA, Ministry of Commerce, National Tariff Commission, Board of Investment, Ministry of IT & Telecom, Federal Board of Revenue and academia to boost local assembly of mobile devices through enhancing investment and employment opportunities in this sector.

The summit will focus on the localisation of parts and components used in mobile manufacturing, localisation of allied equipment like laptops and tablets, targeting export of mobile phones and promoting ease of doing business in Pakistan. The mobile device manufacturing sector is expected to benefit from this summit as it will facilitate further collaborations with international counterparts which can enhance the competitiveness of the sector.

The mobile device manufacturing policy was formulated by EDB in 2020 with the aim to promote local manufacturing of mobile devices in Pakistan and to provide an attractive environment for investors under the “Make in Pakistan” policy of the government.

According to data by PTA, 55 percent of the mobile devices in the country are smart phones while the remaining 45 percent are on 2G Pakistan network.

Riaz Haq said...

Pakistan Manufactured 4.88 Million Mobile Phones in First 5 Months of 2023

The country imported mobile phones worth $516.488 million during the first eleven months (July-May) of the current fiscal year 2022-23, registering a negative growth of 73.46 percent when compared to $1.946 billion during the same period of last year.

Pakistan’s mobile phone imports increased by 308 percent on a month-on-month (MoM) basis in May 2023 and stood at $43.201 million compared to imports of $10.587 million in April 2023, according to data released by the Pakistan Bureau of Statistics (PBS).

Mobile phone imports registered 68.52 percent negative growth on a year-on-year (YoY) basis in May 2023 when compared to $137.212 million in May 2022.

The overall telecom imports into the country stood at $860.441 million during July-May 2023 and registered 66.87 percent negative growth compared to $2.597 billion during the same period of last fiscal year.

Riaz Haq said...

Revenue in Pakistan Laptops market amounts to US$0.88bn in 2023. The market is expected to grow annually by 5.52% (CAGR 2023-2028).
In global comparison, most revenue is generated in China (US$23,250.00m in 2023).
In relation to total population figures, per person revenues of US$3.75 are generated in 2023.
In the Laptops market, volume is expected to amount to 1.54m pieces by 2028. The Laptops market is expected to show a volume growth of 2.5% in 2024.
The average volume per person in the Laptops market is expected to amount to 0.01pieces in 2023.

Riaz Haq said...

Pakistan - Country Commercial Guide

This is a best prospect industry for this country. Includes a market overview and trade data.

Last published date: 2022-11-10
(US$ Million)

Table: Total Market Size




2022* (Estimated)

Total Local Production





Total Exports





Total Imports





Imports from the US





Total Market Size





Exchange Rates





* Sources: Pakistan Economic Survey 2021-22, Ministry of Finance, Government of Pakistan

Pakistan Bureau of Statistics, Government of Pakistan

Local chambers of Commerce and Industry, Trade Essociations, and Market Experts
Despite the global pandemic and domestic macroeconomic challenges, Pakistan’s market for computers and peripherals has seen a steady growth trajectory during the last fiscal year. With virtually no domestic production, the country relies heavily on imports. The local market is generally receptive to U.S. brands, mainly due to the quality and reliability of their products; however, other foreign brands from Japan, South Korea, Malaysia, Taiwan, and China offer a strong competition. Major U.S. brands such as Dell, Hewlett Packard, Intel, Microsoft, and Cisco have established a strong presence in Pakistan.

The information technology (IT) in Pakistan has seen an overall healthy uptick in growth during the last year. Despite overall macroeconomic pressures, the computers and peripherals sector has retained its position as a major prospective sector for the U.S. companies. The public and private sectors in Pakistan place a high priority on the introduction, availability, and utilization of computers and other IT equipment in routine and critical workflows. The Government of Pakistan (GOP) through the National IT Policy emphasizes computer availability, usage, connectivity, and skills development. In addition, the GOP has launched several projects and incentive schemes to ensure a widespread availability of computers to the local consumers. Some of the initiatives include development of software technology parks; special technology zones; the provision of demand-based training; increasing internet penetration through multiple mediums including broadband, wireless broadband, and fiber optic; research and development; digitization of public-sector records, technology incubation centers; and training and skills development centers. According to industry expects, the demand of IT equipment related to cyber security sub-sector is also expected to grow by at least 3 percent in the next few years.

The primary users of computers and peripherals in Pakistan are private businesses; IT services companies, software development houses, call centers, Business Process Outsourcers (BPOs), internet service providers, public and private sector incubation centers, educational institutions, freelance developers, and private users. There are more than 3,000 IT and IT-enabled companies, employing over 100,000 qualified IT professionals in Pakistan. Software development, including specialized application development has emerged as a major business sub-sector during the last several years. According to the latest statistics, there are approximately 25,000 qualified professionals associated with this sub-sector and this number is expected to grow at an annual rate of 3-4 percent in the coming years.

Riaz Haq said...

Yousuf M.Farooq

Full speed ahead

LED Lights Made in Pakistan !

The industry started with just assembling SKD kits imported from China.

Now the PCB, MCPCB, the constant current power supply, plastic parts, metal parts, wires and packaging are now all being Made in Pakistan.