Air Link Communication Limited’s long-trailed move into laptops – fronted by Acer’s E-series – has run into an unusually prosaic roadblock: a missing HS code. Without a customs classification for semi-knocked-down (SKD) kits, the electronics assembler cannot bring in the parts it needs to build machines locally. Management has therefore pivoted to importing completely built-up (CBU) units first, while it waits for Islamabad to assign the SKD code that unlocks full localisation economics. The company has already opened its first letter of credit and expects an initial 10,000-unit CBU shipment to land imminently, but margins and volumes will be lower than the original “assemble-in-Pakistan” plan implied.
In trade logistics, the dullest acronyms often carry the sharpest commercial edge. HS codes – short for “Harmonised System” codes – are the multi-digit identifiers that customs authorities use worldwide to classify goods, apply tariffs, track trade statistics and implement policy exemptions. For firms that localise manufacturing through SKD/CKD routes, the specific HS codes covering parts and sub-assemblies are the difference between a viable margin and a non-starter. In Air Link’s case, the government has not yet assigned an HS code for Acer laptops in SKD form. That gap forces the company to start with CBU imports (taxed and treated differently) and postpone local assembly until the SKD classification exists. As the company tells investors, local assembly can commence “once these codes are assigned by the government”; under the interim CBU model, gross margins are estimated around 16–18%.
The operational knock-on is straightforward. SKD allows some labour and overhead to be captured domestically, often alongside incentives designed to encourage value addition. CBU, by contrast, carries a heavier duty load, leaves less value in-country and compresses profitability. The firm is pressing ahead with a beachhead shipment to establish market presence, but the economics will only look like the original business case when the SKD pathway is cleared and local assembly gets the green light.
Air Link had aimed to bring the first Acer units to shelves in the first half of calendar 2025; the combination of missing HS codes and a slower-than-hoped approvals process has effectively pushed a local-assembly start into 2026. The revised plan now begins with CBU shipments, with local assembly to follow once codes are granted. Research coverage assumes ~45,000 laptops sold in FY26 under this altered mix, a figure below the kind of numbers a full-fledged SKD ramp might have supported. The company’s initial LC and the first 10,000 units are already paced for arrival, but the team is explicit that assembly will start only after HS code issuance.
This “CBU-first” detour matters for cash flows and positioning. At 16–18% gross margins, CBU laptops contribute, but they do not deliver the same operating leverage as SKD, especially once marketing and channel costs are layered in. The upside is that an early retail presence should seed brand familiarity and allow Air Link to learn the laptop category’s quirks (after-sales, service parts, seasonal demand) before turning on the bigger SKD machine.
While laptops stall at the border, televisions are chugging ahead. Air Link launched Xiaomi Smart TVs in 3QFY25, deliberately positioning below the incumbent giants – Samsung and TCL – on price, while matching their headline features (bezel-less designs, Google Assistant integration and the rest). The company and its covering analysts expect the TV line to contribute about Rs5.4 billion of revenue in FY26, on ~40,000 units – well below management’s stretch target of 100,000 but a credible first full-year footprint for a brand-new category. The report’s Industry Local and Import Sales chart also shows how formal local production has been steadily gaining share in adjacent electronics, a tailwind for any assembler that can balance price, quality and after-sales reach.
The strategy with TVs echoes Air Link’s smartphone playbook: compete on value and availability, not just sticker price. Xiaomi’s global software ecosystem – especially a familiar Android TV experience – helps lower switching costs for consumers. If the company can lock in stable panel supplies and keep duty/tax arbitrage in its favour, TVs could become the steady second engine that smooths the lumpier laptop ramp.
Air Link’s corporate narrative still begins at the storefront. The company built its name as a handset distributor and retailer before climbing the value chain into local assembly as Pakistan’s policy environment turned more welcoming. Today, smartphones remain the core: Air Link is a major local assembler for Xiaomi, Tecno and Itel, and is expanding production at a new facility in the Sundar Green Special Economic Zone (SG-SEZ) in Lahore. The site – spanning eight acres across the parent and its wholly owned subsidiary, Select Technologies – qualifies the business for a 10-year tax holiday and a one-time GST exemption on machinery, incentives that improve after-tax returns as volumes scale. The company plans to shift about half of smartphone output to the new plant initially, then migrate the remainder during FY26.
The SG-SEZ campus is also where non-phone lines (laptops, TVs and a to-be-announced home-appliances suite) will be housed, reinforcing the group’s broader push “beyond smartphones.” Management’s channel checks point to an operational shift by December 2025, which underpins an earnings step-up as the tax holiday kicks in.
Air Link’s ascent owes a lot to Pakistan’s policy turn toward local assembly. Two levers mattered most. First, DIRBS – the Device Identification, Registration and Blocking System – curbed handset smuggling, forcing grey-market imports into the formal net. Second, duty structures increasingly favoured locally assembled units over fully built imports. The result, according to research coverage, is that up to 95% of domestic demand was expected to be met by local production by 2025 – a whiplash change that benefited domestic assemblers with scale and brand relationships.
For Air Link, those mechanics translate into dependable volumes across value-priced brands and a platform to add categories. The SG-SEZ tax holiday and GST break on machinery further strengthen economics on every incremental device that rolls off the line. Put simply: if the company can keep components flowing and maintain brand partnerships, the local assembly “flywheel” does a lot of the heavy lifting.
In a bolder move into the premium tier, Air Link has announced plans to open Pakistan’s first official Apple “mono-store” – a single-brand retail concept that would offer a tighter Apple-like experience. The outlet is targeted by December 2025 in Lahore’s Dolmen Mall, and the distributor points to a Rs280m single-day sales record during the iPhone 17 launch as evidence of the latent demand it can channel. Gross margins on iPhone resale currently run in the 8–14% range; a flagship mono-store adds brand theatre, service integration and direct retail control – useful differentiators when grey-channel imports blur pricing signals.
The Apple bet also invites contrast. Regionally, Apple has shifted an increasing share of iPhone assembly into India over recent years, deepening its supplier ecosystem there. Pakistan won’t replicate that anytime soon, but an official retail presence – if executed to Cupertino’s standards – could formalise part of the premium demand that now leaks to parallel imports. For Air Link, the significance is twofold: a richer product mix to offset thinner CBU laptop margins in FY26, and a visible brand asset that signals retail sophistication to other potential OEM partners.
At one level, the Acer delay is simply a clerical miss – no HS code, no SKD imports. But scratch a little deeper and it becomes a stress test of Pakistan’s localisation regime. The state wants domestic value addition, and has rightly used tools such as DIRBS and tariff differentials to grow local assembly in smartphones. Now the same logic must be extended, cleanly and predictably, to adjacent categories like laptops. When codes and approvals lag, firms are forced into CBU stopgaps that blunt the very benefits – jobs, taxes, supplier ecosystems – that policymakers seek.
Air Link’s case is instructive precisely because the commercial pieces are already in place: a brand partner (Acer), a new SEZ facility with a 10-year tax holiday, a trained workforce accustomed to electronics assembly, and a distribution/routing muscle built over a decade in phones. What is missing is alignment between policy intent and execution detail. Fixing that is low-hanging fruit, and would send a useful signal to other OEMs scanning Pakistan for localisation partners.
CBU exposure magnifies FX and tariff risk in FY26. A weaker rupee or a duty tweak can dent already-modest CBU laptop margins. SKD rollout mitigates this, but remains contingent on the HS code and related notifications.
Laptops are more consolidated than smartphones in Pakistan, with entrenched importer-retailers. A price-led counter-move from rivals could pinch early CBU sell-through. Air Link’s offset is breadth: smartphones (Xiaomi/Tecno/Itel) remain the cash engine, while Xiaomi TV traction and a differentiated Apple retail experience add ballast.
Shifting half the phone line to the new site as the laptop line readies will test planning. The upside is the one-time GST exemption on machinery and the tax holiday – powerful cushions during a period of category expansion.
Air Link is hitting the right strategic notes: use a decade of smartphone-assembly know-how and a new SEZ platform to diversify into TVs and laptops; exploit policy incentives to improve returns; and upgrade retail credentials with an Apple-branded flagship. The snag is a surprisingly ordinary one: an SKD HS code that has yet to be assigned. Until it is, Acer will arrive as CBU, margins will be thinner, and FY26 laptop volumes will underwhelm the original plan. The good news is that the TV line is already contributing, smartphone assembly remains robust under Pakistan’s localisation regime, and the Apple mono-store – if opened on schedule – can become a premium showcase that strengthens Air Link’s hand with global brands.
The fix is administrative, not industrial. If Islamabad wants Pakistan’s electronics playbook to evolve beyond phones, it must sweat the small stuff: codes, notifications, and predictable timelines. Do that, and Air Link can move swiftly from “CBU stopgap” to full local assembly – and turn a delayed launch into a durable new profit pool.
