The assembly of cell phones in Pakistan will soon be able to meet 90% of the total demand. With this, prices may decrease by 10 to 15%.
In Pakistan, cell phone companies have created 60,000 jobs since the industry policy was rolled out in July. The demand for smartphones is expected to increase by 90% by June, meaning that the industry will soon be catering to 90% of the cell phone demand in the country.
An anonymous industry source told us that the duty incentives to make cell phones in the country and cheaper labor in the country will continue to lower the prices of cell phones.
Pexagon Holdings Limited can assemble 10 million cell phones a year. These include Infinix, Tecno, ITEL and Nokia cell phones that they produce in Pakistan.
Before the policy, duty on imported completely built units (CBUs) was low, so prices should not change too much. “Price can be expected to go down because the mobile industry is labor-intensive,” he said. “For instance, labor cost is $1,000 in China and in Pakistan, it is $150.”
Manufacturers in Pakistan are able to make low-cost phones because of the duty structure that favors cheaper phones.
The duty on a $200 phone is Rs2,000 and the duty on a $200 phone is Rs10,500.
Pakistan has given 30 companies the right to produce mobile phones. Out of these, 19 have already begun to produce them.
Allawala predicts that increased localization will eventually lead to exports.