Egypt's Local Assembly Efforts Poised to Double Handset Market by 2031
Egypt's mobile phone industry is experiencing a significant expansion, driven by the Egyptian government's "Egypt Makes Electronics" initiative and foreign investments from major global manufacturers.
The initiative, which involves raising tariffs on finished devices and easing taxes on imported parts, has encouraged domestic production. Companies like Samsung, Transsion, Oppo, Vivo, Xiaomi, and Nokia through HMD Global partnerships have set up assembly operations in Egypt. Samsung even produced its first "Made in Egypt" Galaxy A13 in 2022.
This shift towards local production has led to a surge in imports of components, helping to supply the expanding assembly lines. However, persistent supply chain bottlenecks, customs delays, and foreign exchange shortages continue to weigh on production in Egypt's handset industry.
The expansion of the sector has not only created over 2,000 jobs but has also attracted over USD 87 million in investment. The sector now has an installed production capacity of 11.5 million units annually, with annual output rising significantly from 1.5 million units in 2021 to around 3 million units in 2024. Despite this growth, capacity utilisation remains low at 26 percent.
The conditions in Egypt are creating a stable, price-sensitive market in which demand for low-cost smartphones under USD 150 is expected to grow strongly. This is due in part to the Egyptian pound's depreciation, which has made imported devices prohibitively expensive. Imports of finished mobile phones fell from USD 1.8 billion in 2020 to just USD 54 million in 2024.
However, rural incomes remain limited, restricting smartphone penetration in less urbanized areas. Regional geopolitical risks such as Red Sea shipping disruptions and broader instability in the Middle East and North Africa present further uncertainties.
Looking ahead, GDP growth is forecast to average 4.3 percent, and handset sales in Egypt are expected to grow from USD 2.5 billion in 2025 to over USD 4.8 billion by 2031, according to a Fitch Solutions forecast. Reports suggest that policymakers and industry stakeholders are courting additional foreign investment, with Apple potentially being approached about potential iPhone assembly in Egypt.
Despite the challenges, Egypt's mobile phone industry is poised for continued growth and development, offering exciting opportunities for both local and international players in the coming years.
