Tech tragedy : IT sector fighting for survival

Soaring dollar rate, import duties have exponentially reduced the sales of laptops, smartphones

LAHORE:

As the dollar rate continues to skyrocket, the resultant spike in prices of devices like laptops and smartphones has instigated a sharp decline in the demand for these tech gadgets, shaking the information technology (IT) industry to its core.

Despite the unprecedented, billion rupee expansion of the tech industry following the Covid-19 related lockdowns, which mandated the possession of various communicative devices including laptops, personal computer (PC) components like the mouse and keyboard, and smartphones for virtual learning and remote work, the recent spell of economic instability followed by a surge in the dollar rate has downsized the flourishing sector.

Bilal Ahmed, a wholesale dealer of tech paraphernalia at the Hafeez Center, revealed the drastic drop in his sales during the past one year, while speaking to The Express Tribune.

“Our sales of devices have decreased by almost 70 per cent, ever since the prices of PC hardware doubled,” sorrowfully shared Ahmed, who further informed that the high prices of legally procured tech devices meant that ample room was available for the black IT market to burgeon.

According to market sources, the increase in prices of gadgets like laptops, smartphones and PC components by 70 to 100 per cent alongside hefty import duties, has propelled the smuggled equipment industry to take up 65 per cent of the tech market’s share.

In addition to the wide circulation of smuggled devices, high import taxes means that the illegal business of replacing the International Mobile Equipment Identity (IEMI) number of pricey brand-new smartphones with that of the cheap secondhand alternatives, in order to evade duties, has started budding.

Furthermore, the popularity of black-marketed devices like laptops, has presented a new conundrum for students and professionals, who scramble from shop to shop after the woeful purchase of a faulty gadget, in search of an inexpensive repair since they cannot claim warranty for an illegally procured item.

Tech experts like Athar Sheikh, manager of an online IT store, blame the state of the economy and the peaking dollar rate for instigating the current crisis. “The prices of gadgets in dollars are consistent, however, for the Pakistani consumer, they are always on the rise since the dollar rate is always soaring,” regretted Sheikh who further opined that the imposition of heavy taxes by the Pakistan Telecommunication Authority (PTA) acted as the final blow to the already crumbling tech sector.

“PTA levies an import duty of almost Rs 162,000 on a smartphone costing only Rs 150,000,” shared Sheikh.

Agreeing with Sheikh, Shehzad Ilyas, an IT expert associated with a major software house in Lahore, felt that a timely reduction of import duties levied against the IT sector, was indispensable for a tech revolution to occur in Pakistan. “The world is turning digital and many developed countries across the globe have even started working towards introducing the 6G technology. Unfortunately, we are still stuck on the 4G technology and if we are to progress towards the future, our government must subsidise the tech sector,” asserted Ilyas, while talking to The Express Tribune.

Published in The Express Tribune, June 19^th, 2023.