Mobile phone manufacturing crosses 4m units in June

KARACHI: In a striking development for Pakistan’s mobile phone market, local manufacturing and assembly of mobile phones have doubled from the previous month, as revealed by the Pakistan Telecommunication Authority (PTA).

Data for June 2024 indicates a significant leap, with local companies producing and assembling 4.26 million units, marking a 13-fold increase year-on-year (YoY) and a two-fold increase month-on-month (MoM).

This sharp increase in local mobile phone production is attributed to a surge in pre-buying activities following the announcement of an 18 per cent Goods and Services Tax (GST) on all mobile phones for the fiscal year 2025. The tax hike prompted consumers to purchase mobile phones before the new rate took effect, driving the remarkable growth.

In the first half of 2024, local production reached a total of 17.34 million units, a three-fold increase compared to the same period last year. This growth is a direct result of import restrictions introduced in the previous year, which have bolstered local manufacturing.When compared to the first half of 2022, the current growth represents a 23 per cent YoY increase. This upward trend is fuelled by a gradual economic recovery, higher local manufacturing share due to increased taxes on imported phones, and a growing population.Out of the 17.34 million locally assembled units in the first half of 2024, 64 per cent (11.15 million units) are smartphones, while the remaining 36 per cent (6.19 million units) are 2G phones.

Pakistan is now meeting 98 per cent of its mobile phone demand through local production, a significant increase from 96 per cent last month, and substantially higher than the 67 per cent average over the past five years and 47 per cent over the past eight years.

All major mobile brands except Apple’s iPhone are now manufactured or assembled in Pakistan. The top ten locally assembled brands for the first half of 2024 are led by Infinix with 2.5 million units, followed by Tecno (1.9 million units), Itel (1.8 million units), VGO Tel (1.8 million units), Vivo (1.7 million units), Xiaomi (1.6 million units), Realme (1 million units), Nokia (0.8 million units), and G’Five and Oppo with 0.6 million units each. Industry experts at brokerage house Topline Securities predict that the total demand for mobile phones in Pakistan may reach 33 million units by the end of 2024, up 44 per cent from the 22.9 million units sold in 2023. This forecast is based on current trends and the recent GST increase.