The mobile industry is one of the highly competitive industries in Pakistan. Because we all know that smartphones and gadgets are an integral part of our daily life. That’s why the import of smartphones in Pakistan increased by 6.25 percent in 2015-2016.
But fast forward to the current 2023 year, there has been a sudden drop in the import of mobile phones. The Pakistan Bureau of Statics (PBS) stated—there was a significant decline in imports during the first half of the fiscal year of 2023, with a reduction of up to 66%.
This unexpected drop in the mobile import market has led to a sudden rise in mobile prices in Pakistan. But is this could be the only reason? You must be thinking about the reason why mobile prices are getting high in Pakistan every passing day and month, like other millions of Android and iPhone users.
Some of the reasons, like the devaluation of the Pakistani rupee, has to lead to an increment in tax is also one of the main reason. Other factors like the current situation of Pakistan’s democracy, lack of local production, and high import costs are adding fuel to this fire.
In addition, Inflation and devaluation of the Pakistani currency have encouraged all the leading smartphone brands to increase their mobile prices. As a result, some big brands like Samsung, Apple, Huawei, Oppo, and Vivo have significantly increased their smartphone prices in Pakistan.
For example, the price of Oppo A54 was 31,000pkr last year, which has now increased to 50,000pkr. This has discouraged many buyers as well as many retailers. So what can you do in this situation? Hover down to know what other possible reasons that lead to an increment in mobile prices.
Plus, learn what you can do in this situation if you want to buy a decent smartphone or iPhone at reasonable pricing.
Factors Contributing To The High Price of Smartphones In The Pakistani Market
High Demand
One of the leading factors that notably increase the price of mobile phones is the high consumer demand in the market. Because high demand for any product leads to saturated market competition, which ultimately results in higher prices for mobile phones. High demand can also cause supply chain issues and a shortage of that mobile model.
It not only made the latest mobile model expensive but also affected the original price of the mobile phone. According to the states, increased demand for a specific model of mobile phone can increase its original price by 67%. Moreover, the supply of a popular phone is limited, which leads to the retailer and reseller charging a premium price.
Rise In Production Cost
Another factor that follows the mobile price hike in Pakistan is a rise in production costs. A rise in manufacturing not only decreases the supply but also creates cost-push Inflation. Because most mobile manufacturing companies pass the increment in production costs to the consumers by increasing prices.
But in the first place, why rise in production costs increase? There are many reasons, like rising labor costs, accretion in the raw material cost, and increment in the transportation cost. All these factors add up and influence the overall rise in the manufacturing budget. This problem has been circulating, which has caused an increase in the price of smartphones in Pakistan.
Currency Devaluation
Continuous fluctuations in Pakistan’s currency and then its devaluation is the prominent reason for higher mobile prices in Pakistan of iPhone and Android both. Because when the local currency is devalued, the cost of importing items, including mobile phones, increases. As the foreign currencies such as US Dollar or Euro that are used to do import goes up.
As a result, manufacturers and distributors increase the price of their mobile phones to compensate for the cost of importing. Moreover, the currency depreciation also makes it expensive to borrow money from International marketplaces to finance imports. It not only leads to an economic recession but also causes an existential crisis.
Taxes nd Import Duties
Tax and Import duties play an important role in deciding the final price of a mobile phone. The taxes and custom duty charges vary from mobile brand and model. It means each brand has a different tax ratio. Generally, in Pakistan, the tax and customs duties charges range from 20%-44%.
For example, the retail price of Samsun Galaxy S21 Ultra has 229 999pkr price. And the taxes and customs duty charges include 67 743pkr. Similarly, the current retail price of the Apple iPhone 13 Pro Max is 303,999 pkr. But the taxes and customs duty charges add up to 110,782.
Import Bans
You have heard about the new ban on hundreds of imported items, including smartphones and electronics, to tackle the fluctuating economic situation. This reason is one of the main ingredients that add spice to the high price of mobiles in Pakistan. Furthermore, the drastic increment in the current exchange rate is the import bill’s role.
Keeping this situation in mind, not only the latest mobile prices have increased. But it has also led to rising the existing value of the mobile phone in Pakistan. So whether you are an Android or iPhone user, buying the latest mobile phone can cost you an arm and a leg.
Conclusion:
So what can you do if you want to purchase a decent mobile without weighing much on your wallet? First, you can research different brands and models to find the best deal. Plus, you can consider buying a slightly older model, which still has the same features, but at a lower price.
