Pakistan's local smartphone manufacturing declines amid import surge

Pakistan's local smartphone manufacturing industry has faced significant pressure following a sharp increase in the import of fully built mobile phones, especially used devices, The News reported on Wednesday, citing data from the Pakistan Telecommunication Authority.

The data shows that Pakistan imported 105,121 used smartphones in September, valued at approximately $14.03 million. During the same month, another 23,616 new fully built mobile phones were imported at a value of around $19.40 million.

Taken together, imports of new and used fully built smartphones reached 128,737 units in a single month, with a combined value of approximately $33.43 million.

Used smartphones accounted for nearly 82% of the total number of fully built imported phones, highlighting a significant shift in demand towards imported second-hand devices. In contrast, local smartphone production fell to 628,030 units in September. Industry representatives say monthly local smartphone manufacturing had previously remained at around 1.1 million to 1.2 million units, indicating a sharp decline in domestic output.

Fully built imported smartphones were equivalent to around 20.5% of locally manufactured smartphone volumes during the month. When local production and imported fully built smartphones are considered together, imported devices accounted for roughly 17% of the combined smartphone volume.

Feature-phone production, however, remained relatively stable. Around 1.053 million feature phones were manufactured locally in September, suggesting that demand for lower-priced handsets continues to hold as consumers face mounting financial pressure.

Industry sources say higher taxes on smartphones, weaker consumer purchasing power and the growing inflow of used imported phones are putting local manufacturers under increasing strain. Aamir Allahwala, Senior Vice President of the Pakistan Mobile Phone Manufacturers Association, also expressed concern over the trend, saying imports of fully built and used mobile phones were rising while local production was declining.

He warned that if local manufacturing units became commercially unviable and factories were forced to shut down, a large number of workers associated with the mobile phone manufacturing sector could lose their jobs.

Industry stakeholders say the increasing dependence on fully built imported phones is not only hurting domestic manufacturing and employment but is also adding pressure on Pakistan’s foreign exchange resources.

They have urged the government to review the taxation and import framework for mobile phones and take steps to protect local manufacturing, preserve jobs and reduce the country’s growing dependence on imported devices.