The production of smartphones decreased in the country for the month of September while manufacturing of feature phones increased just as the nation is preparing to embrace the 5G era.
The Bangladesh Telecommunication Regulatory Commission (BTRC) released statistics in this regards, that showed a 25% drop in local manufacturers' output of handsets in September.
The total number of phones manufactured in August was 2.97 million, but according to BTRC data, that number dropped to 2.27 million in September.
In September, the production of 4G smartphones in the country was 582,000 units and that of 5G was 5,000 units.
In August, 823,000 units of 4G phones and 3,000 units of 5G phones were produced locally.
On the other hand, the production of feature-phone handsets increased to 73.62% of the total in September from 72.17% in the previous month, with the production of 2G or feature phones was 1.64 million units in the same month.
The local manufacturers stopped producing 3G handsets in May as the telecom regulator earlier decided to ban the import, assembly and manufacture of 3G-only handsets to promote the widespread adoption of smartphones as a support mechanism for digital transformation in the country.
Despite the increase in the production of feature phones, the total production of handsets almost halved in nine months -- from 4.45 million units in January to 2.27 million units in September, according to the BTRC monthly data.
Industry insiders and manufacturers seem to be divided into the factors leading to the decline.
While manufacturers pointed out rising inflation and dollar prices as the cause of the decline in handset manufacturing, experts pointed out the quality of local handsets behind the decline.
Local industry players and insiders said that rising dollar prices and soaring inflation has caused people to cut down on expenses, impacting their purchase power.
According to local mobile manufacturing and assembling industry players, their sales declined by over 20% during the first half of this year.
Local smartphone production declined by around 50% month-on-month in May from April, earlier this year.
This, according to some manufacturers, is a precedent of the economic downturn in the country.
In July, the Chief Operating Officer of Walton Mobile Md Abu Jahid told Dhaka Tribune that the production has not declined to that extent, rather the sales have declined.
This happened as the prices of mobile phones increased due to inflation and a hike in raw material prices, freight costs and dollar prices, which led to increased production costs.
Walton's mobile phone production is normal, he added.
Co-founder and CEO of Pickaboo.com Morin Talukder echoed the same sentiments.
“During the first half of the year, smartphone prices have increased twice. In May, the price increased by 8-10% for the dollar price, while in June, the price was again increased for the inclusion of stage VAT,” he told Dhaka Tribune.
“We see the demand for smartphones has dropped by 35-40% in the last two or three months with sales declining significantly even with Eid, as sales during the festive season were not satisfactory - despite huge discounts and EMIs being offered for purchases,” the Pickaboo top-brass also said.
However, according to the Director of the Policy Research Institute of Bangladesh (PRI), Dr Mohammad Abdur Razzaque said the declining trend may not be linked to the economic situation only.
The researcher reportedly cited the poor handset quality of local manufacturers as the reason.
As of January 2021, local manufacturers fulfilled almost 80% of the country's mobile phone requirement, generating more than 15,000 jobs.
Currently, 15 companies have licenses to manufacture mobile handsets. These include - Walton Digi-tech Industries Ltd, Fair Electronics (Samsung), Edison Industries (Symphony), Alamin and Brothers (5 Star), Carlcare Technology BD Ltd (itel and Techno), Anira International (Yunstar), Best Taicool Enterprise Ltd (Vivo), Grameen Distribution (Lava), Banglatrinic Technology (DTC), Benley Electronic Enterprise (Oppo), Okay Mobile, and Mycel Technology.