Introduction
According to a report in the Express Tribune, Apple Inc. has initiated it’s iPhone production in Pakistan. The plan has been agreed upon as the government has decided to give incentives to the tech giant.
The report explains that Apple Inc. seeks government support for initiating operations in the country, which includes the provision of land at a lower price, an 8% reward on achieving the goals, and repairing 2-3-year-old iPhones before starting production of new iPhones.
According to the CEO of the Engineering Development Board (EDB), Hammad Ali Mansoor, the tech giant adopted the strategy in India, Malaysia, and Indonesia of repairing old iPhones initially to train the people and then went for production of phones.
Strategic Implications
Apple’s tech manufacturing investment in Pakistan underscores a significant transformation in the national technological sector. Companies are reassessing their strategy of the global supply chain shift.
Furthermore, nations are diversifying their production sites as a result of the growing trade tensions between Beijing and Washington. However, the company aim to minimize its dependency on China, which serves as a significant hub for the manufacturing of the iPhone and related goods.
The agreements reflect that Pakistan is ready for multinationals, intending to increase their production and invest in high-tech manufacturing projects.
Economical Impact
The deal will bring a shift in the job market in Pakistan. If in the future there is an expansion from refurbishment of old iPhones to manufacturing of new models, it will be highly beneficial for multiple tech and non-tech sectors. Small business firms and local vendors will get benefits from the increased demand.
The officials expect to generate $100 million in revenue from the sale of repaired iPhones in the first year.
Multiple jobs will be created in manufacturing and corporate management. Additionally, new opportunities will arise in the supply chain, including roles in product quality, technical support, and management.
Challenges
Pakistan must focus on the challenges and risks it faces. To compete with global players, it needs to implement supply chain management systems effectively, provide logistical support, and create policies that are friendly to businesses. Political uncertainty also presents risks for investors.
Government regulations shifts are another risk factor that the company faces. Businesses and foreign investors may struggle with long-term investment plans due to tax policies. In addition, an inconsistent electricity supply could be another barrier for mass manufacturers.
Future Outlook
Apple’s supply chain diversification strategy may boost local technological development, attract international investment, and strengthen Pakistan’s position as a competitive hub for smartphone and electronics production in the region.
Apple’s plan to launch its footprint in Pakistan will bring long-term growth to the tech sector. Moreover, this will bring stability to the country’s economic growth and inclusion in cross-border supply chains.
Source: ProPakistani, Tribune