Pakistan has witnessed a remarkable surge in mobile phone production in the first five months of 2024, positioning itself as a significant player in the mobile phone manufacturing and assembly industry.
Record-Breaking Production Numbers
From January to May 2024, Pakistan’s local manufacturing and assembly plants produced an astounding 13.08 million mobile phones, marking a significant increase of 168% compared to the same period last year . This surge is attributed to a combination of factors, including import restrictions and a gradual economic recovery. Notably, May alone saw the production of 2.23 million mobile handsets, demonstrating the industry’s capacity to scale production effectively.
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Smartphone vs. 2G Devices: Production Breakdown
The composition of locally produced mobile phones includes 4.98 million 2G devices and 8.1 million smartphones . This indicates a substantial shift towards more advanced technology, with 61% of the mobile devices in Pakistan now being smartphones . This trend reflects a growing preference for smartphones among Pakistani consumers, driven by the increasing demand for advanced features and connectivity.
Export Activity and Import Statistics
In addition to meeting domestic demand, Pakistan has also made significant strides in mobile phone exports. In the first five months of 2024, local manufacturing and assembly plants exported 7.6 million mobile phones . However, despite the growth in local production, commercial imports of mobile phones continued, albeit at a reduced scale. In May 2024, more than 100,000 mobile sets were imported, indicating that the country still relies on imports to a certain extent.
Economic and Regulatory Challenges
Despite the impressive production numbers, the mobile phone industry in Pakistan faces several challenges. Economic difficulties and high-interest rates have caused a decline in production since 2022 . Additionally, restrictions on importing parts and accessories have hindered the industry’s growth. In 2023, local manufacturing of mobile phones decreased by about 4%, largely due to these import restrictions.
Moreover, the government’s new tax measures, including an 18% standard tax on mobile phones, are expected to impact both manufacturers and consumers. This tax is particularly burdensome for higher-end smartphones, potentially affecting the affordability and accessibility of these devices for Pakistani consumers.
Shift Towards Local Manufacturing
A significant transformation in Pakistan’s mobile phone industry is the shift from imported to locally manufactured and assembled phones. In 5MCY24, local manufacturing accounted for 95% of the mobile phone demand in Pakistan, compared to the previous five-year average of 67% . This shift is driven by government policies encouraging international mobile players to establish assembly plants in Pakistan, coupled with the affordability of locally produced phones.
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Infinix led the production effort in the first five months of 2024, manufacturing 1.46 million units, with other companies like Itel and VGO TEL also contributing significantly. As the industry continues to grow, major players like Air Link Communication and Lucky Cement are expected to benefit from the expanding market size and the increasing share of locally manufactured phones.