Assembly Isn’t the Goal. But, It Can Be the Starting Point

Pakistan now assembles 94% of the mobile phones it consumes—the highest level in nearly a decade. Headlines celebrate this as a manufacturing triumph, and rightly so: over 25 million phones rolled off local lines in just the first 10 months of 2025.

But behind this milestone lies a critical truth: assembly is not manufacturing.

The real story isn’t in the units produced—it’s in the gap between supply and adoption. Despite massive local assembly, smartphone ownership remains a barrier for a significant portion of the population. Distributors are holding surplus inventory, and manufacturers have scaled back production by 34% year-on-year (October 2025) to avoid further stockpiles.

This isn’t failure—it’s a signal. Assembly is a necessary first step. But without a deliberate strategy to build component capabilities, it risks becoming a dead end.

This post outlines Pakistan’s realistic, three-phase path from assembly to true smartphone manufacturing—and why getting the sequence right matters more than the headline numbers.

The Current State: What “94% Local Production” Really Means

Let’s ground ourselves in the verified data from the Pakistan Telecommunication Authority (PTA).

📈 Production Momentum Is Real

• Total output (Jan–Oct 2025): 25.11 million mobile phones

  • Smartphones: 13.2 million units (53%)

  • Feature phones: 11.9 million units (47%)

• Rapid shift: Just four months earlier (June 2025), smartphones made up only 46% of production.

This growth reflects real investment. Over 25 manufacturers now operate in Pakistan, led by:

1. Infinix: 3.12 million units

2. VGO Tel: 2.82 million

3. Vivo: 2.27 million

4. Itel: 2.06 million

5. Tecno: 1.62 million

🏭 Local Demand Fulfillment Has Improved Dramatically

• 2025: 94% of mobile phone demand met locally

• 2020–2024 average: 77%

• 2016–2024 average: 52%

This is progress. But it’s import substitution through assembly, not deep manufacturing. Phones are put together locally—but the core components (chips, displays, batteries) are still imported as CKD/SKD kits.

📉 The Adoption Paradox Tells the Real Story

Here’s the critical challenge: while 70% of active mobile devices in Pakistan are now smartphones, this doesn’t translate to universal population penetration. The high cost of devices, relative to income, remains a major barrier for a large segment of the population.

As Dr. Noman Said, CEO of SI Global Solutions, puts it:

“Widespread smartphone adoption is essential to empower citizens with access to education, skills development, financial services, and digital platforms.”

Without mass adoption, assembly lines run below capacity. That’s exactly what’s happening now: distributors hold surplus inventory, forcing manufacturers to scale back production.

Why Assembly Alone Isn’t Enough

Assembly solves one problem: reducing reliance on imported finished goods. But it creates another if not strategically managed. Economist Ammar Habib Khan provides a crucial warning: without a clear export strategy, import substitution can “destroy consumer surplus” by keeping prices high and fails to build long-term competitiveness.

🔁 The Inventory Trap

Industry analysts expect only 7–8% year-over-year sales growth over the next 12 months—modest, not explosive. This suggests the market is saturated at current price points, not starved for supply.

🌍 The Export Illusion

Khushnood Aftab, CEO of Viper Group, rightly notes that local production “will help [brands] tap export opportunities.” But recent reports contain zero data on actual exports. Why?

Because assembly alone doesn’t make phones export-competitive. Without local components, Pakistani-assembled phones cost nearly the same as those from Vietnam or India—where 35–40% of components are locally sourced. As Ammar Habib Khan argues, the true benefit comes from building an export footprint, not just replacing imports.

💡 The Missing Ecosystem

Dr. Said’s call for “buy-now-pay-later services to increase smartphone accessibility” reveals the core issue: affordability, not availability.

Assembly doesn’t lower prices if components are still imported. And without affordability, millions of Pakistanis without smartphones remain excluded from the digital economy.

The 3-Phase Path to Real Manufacturing

Pakistan doesn’t need to skip assembly—it needs to build beyond it. Here’s a realistic roadmap.

Phase 1: Stabilize Domestic Assembly (2025–2026)

Goal: Align production with real demand and clear surplus inventory.

Key Actions:

• Partner with BNPL providers to boost accessibility (per Dr. Said’s recommendation)

• Create export corridors to Afghanistan, Central Asia, and Africa for surplus stock

• Shift success metrics from “units assembled” to “% of population with smartphones”

Realistic Target: Raise the share of smartphones among active devices from 70% to over 75% by end-2026.

Phase 2: Anchor Component Manufacturing (2027–2029)

Goal: Shift from CKD/SKD assembly to local component production to build value and reduce costs.

Key Actions:

• Incentivize plastic casings, battery packs, and packaging manufacturing (low-tech entry points)

• Create specialized electronics zones with reliable power and fast customs clearance

• Tie future assembly incentives to minimum local content requirements (start at 20%, scale to 40%)

Realistic Target: Achieve 30–35% local value addition by 2029, moving beyond simple import substitution.

Phase 3: Build Export-Led Ecosystem (2030+)

Goal: Make Pakistan a regional hub for affordable, reliable smartphones, fulfilling its export potential.

Key Actions:

• Develop precision manufacturing skills through technical colleges

• Establish quality certification aligned with global standards

• Target $500M–$1B in annual smartphone exports by 2030

Realistic Target: 50%+ local value addition with Pakistan competing on quality + cost, not just assembly speed.

The Role of Policy: What “Favourable” Really Means

Both experts in the BRecoder report call for better policy—but what does that look like in the context of building a competitive export footprint?

🔧 Khushnood Aftab’s Vision

“Pakistan has the potential to significantly expand the production of smart devices… provided the government introduces favourable and investor-friendly policies.”

Translation:

• Long-term duty structures (not ad-hoc changes every 6 months)

• Fast-track approvals for component manufacturers

• Export credit guarantees to de-risk international sales

🤝 Dr. Noman Said’s Ecosystem Approach

“The government and private sector must work together to promote smartphone adoption nationwide.”

Translation:

• National smartphone affordability program (subsidies for low-income users)

• Digital literacy + device access bundled in education initiatives

• Rural connectivity as a prerequisite for adoption

Conclusion: From Assembly Lines to Ambition

Let’s be clear: 94% local phone assembly is an achievement worth celebrating. It shows Pakistan can attract global brands, scale production, and meet domestic demand.

But assembly isn’t the finish line—it’s the foundation. The economic analysis is clear: without a strategic pivot to exports and local value addition, the current model has limited long-term benefits.

The real test isn’t how many phones we put together. It’s whether we can build the ecosystem that makes those phones:

• Affordable for the millions who still can’t access them

• Exportable to markets beyond our borders

• Truly ‘Made in Pakistan’—with local components, local jobs, and local value

As Khushnood Aftab says, Pakistan has the potential. But potential needs direction.

Let’s design the next chapter not around volume, but around value.