Pakistan’s mobile market hit by sudden price spike

ISLAMABAD: (Zubair Kasuri): Pakistan’s smartphone market has been hit by an earthquake in prices. The well-known global brand Samsung increased the prices of its flagship models overnight without any prior public announcement, after which a wave of anxiety has spread in the market.

According to retailers, the new prices were implemented suddenly and when the shops opened in the morning, consumers faced updated rates. It is being told that the increase has been made on various models by about 2 to 6 percent, however, this increase is being felt much more by consumers already under the pressure of inflation.

This development has come at a time when the number of mobile subscriptions in Pakistan has crossed 200 million and an estimated 70 to 80 million people are using smartphones. A large number of the country’s young population relies on smartphones for online education, freelancing, digital marketing, e-commerce and social media businesses, so the price hike could directly impact their employment and economic opportunities.

According to the data available from the PTA, more than 30 million mobile phones were assembled locally in Pakistan last year, while on average 2 million to 2.5 million phones are being manufactured or assembled in the country every month, including a large number of smartphones. Currently, several brands in Pakistan, including Infinix, Tecno, Xiaomi, Vivo, Oppo, Samsung, itel and VGO Tel, are bringing their products to the market through local assembly, however, key components, especially chipsets, are imported from abroad.

Market sources say that this price hike has been made at a stage when the mobile phone business was already in a slowdown. Due to the decline in sales, many companies and distributors had turned to installment schemes to maintain their sales and some brands had started providing phones in installments of up to a year. According to retailers, buyers were preferring installments over cash payments as it had become difficult for the middle class to pay a lump sum.

Experts say that now that prices increase further, the monthly installment amount will also increase, which may further reduce demand. This will not only reduce sales but will also increase pressure on local assembly plants and distribution networks. Business circles believe that if sales decline further, new investments in the sector may be affected and some projects may be slowed or delayed.

Speaking to Flair magazine, sources from Chinese mobile companies have confirmed that their new shipments are becoming more expensive and preparations are underway to increase prices. According to him, the stock coming from China is becoming available at a higher cost than before because the prices of chipsets and other key components have increased, so it is not possible to maintain the old price on the new shipment. Market circles say that if other brands also increase prices officially, the entire sector will feel its impact.

On the other hand, experts are also expressing fears that if the prices of brand new phones continue to increase, the influx of used mobile phones from abroad may increase. The trend of bringing phones in personal luggage through airports, non-customs paid devices and imports from informal sources is likely to increase, which may affect both government revenue and the local industry.

According to business circles, Pakistan’s economy is already under pressure and in such a situation, the cost of a basic digital necessity like a smartphone is a cause of concern for consumers as well as investors. If sales slow down further after this price earthquake, not only the market size may shrink but also future investments in the mobile phone industry may be negatively affected. Now, eyes are focused on whether this increase is a one-time reaction or whether more shocks lie ahead in the coming months.