Transsion wants to make phone components in Pakistan while local smartphone output falls by a third

Transsion Holdings, the Chinese owner of Tecno, Infinix and Itel, told Pakistan's finance minister on 13 November that it wants to move beyond assembling phones in the country and start making components. The timing matters because Pakistan's assembly lines are building fewer smartphones than a year ago, and smartphones are the product a component policy exists to deepen.

Finance Minister Muhammad Aurangzeb met Transsion founder and chairman George Zhu in Islamabad, according to the Finance Division. The company briefed him on its smartphone, electric bike and energy storage businesses in Pakistan and said it wants more value addition locally, through component production that could open opportunities for local businesses. Aurangzeb welcomed the continued interest, pointed to macroeconomic stability as the basis of investor confidence and encouraged more engagement with government institutions. No investment amount, site or timeline was given.

Smartphones fell fastest

Local plants made 20.08 million handsets in January to September 2026, against 22.78 million in the same months of 2025. That is 2.70 million fewer units, a fall of about 12 percent. The total hides a change in mix. Smartphone output dropped from 11.92 million to about 8 million, a loss of roughly 3.9 million units, or a third. Output of 2G feature phones rose from 10.86 million to about 12 million, a gain of about 1.1 million, or 10 percent. The 2026 split is reported in round numbers, which is why the two changes (minus 3.9 million, plus 1.1 million) differ slightly from the total fall.

In share terms, smartphones were 52 percent of local output a year ago (11.92 divided by 22.78) and are about 40 percent now (8 divided by 20.08). Feature phones went from 48 percent to about 60 percent. The shift matters for a component plant because a smartphone carries a larger board, a display, a camera set and a bigger battery, while a feature phone has far fewer and cheaper parts. The plants are busy, but they are busy with the product that leaves the least room for local content.

What the draft policy proposes

The draft Mobile and Electronic Device Manufacturing Policy, as reported in January, sets the yardstick a component plan would be measured against. It targets 50 percent local production of mobile phone components within five to eight years and exports of $700 million. Each semi knocked down smartphone kit would need at least 40 locally fitted parts, and each feature phone kit at least 15, with the Engineering Development Board tasked with specifying the thresholds. The import tariff on finished phones would exceed the tariff on kits by at least 30 percent, and companies that miss localisation benchmarks would face penalties, including suspension of import licences. The final text may differ from the January reports.

Parts or value

A phone assembled from a semi knocked down kit is mostly an import. Local workers mount the mainboard, display, battery, camera modules and housing that arrive from abroad. A parts count rewards the cheapest items first, because a plastic back cover counts as one part just as a processor does. A 40 part rule can therefore be met without touching the components that carry most of a phone's cost: the chipset, memory, display and camera. Whether the 50 percent target means anything depends on whether it is measured in parts or in value, and the draft as reported counts parts.

The mix data sharpens that point. With feature phones now about 60 percent of output and carrying a lower threshold of 15 parts, a compliance record could look healthy while the smartphone share, where the 40 part rule bites, keeps shrinking. A single measure of local content across all handsets would hide that.

The likeliest first steps for Transsion are the ones with the lowest capital cost and the shortest supply chains: packaging, chargers and cables, battery pack assembly, housings and mainboard assembly. They need modest tooling and no semiconductor fabrication, which no Pakistani plant can offer. Transsion has not named the components it would make.

The gains are uneven. Pakistan gains if local parts raise value added and create export volume, which the $700 million target depends on. Transsion gains tariff protection and incentives in a market where its brands are among the biggest. Smaller assemblers lose if suppliers cluster around one large buyer and set terms for everyone else. The risk is that localisation is counted in parts while the import bill for chips, screens and memory barely moves.

What to watch is whether Transsion's plan reaches the Engineering Development Board with named components, volumes and a site. The board is the body that would set the part thresholds, so its response will show whether a component plant is a serious proposal or a conversation.