Egypt’s Mobile Phone Market on Growth Path
Egypt’s handset market is entering a phase of rapid expansion as the country accelerates local mobile phone assembly. Backed by government policies and increasing consumer demand, the market is projected to double by 2031, according to a new forecast from Fitch Solutions.
The report projects that handset sales will grow from USD 2.5 billion in 2025 to over USD 4.8 billion in 2031, representing a compound annual growth rate (CAGR) of 11.4%.
Local Assembly Driving Growth
Egypt’s local handset assembly industry began with SICO’s Nile X smartphone in 2019 and has since attracted major global manufacturers.
- Samsung produced its first “Made in Egypt” Galaxy A13 in 2022.
- Oppo, Vivo, Xiaomi, and Nokia (via HMD Global partnerships) have all set up assembly operations.
- The industry now has an installed production capacity of 11.5 million units annually, supported by USD 87 million in investment and more than 2,000 new jobs.
Annual output has increased significantly, reaching 3 million units in 2024, compared to 1.5 million in 2021. However, capacity utilisation remains low at 26%, though it is expected to climb to 80% by 2031.
Even with that growth, Fitch predicts a production gap of 3.2 million units will persist.
Changing Trade Flows
The drive to localise handset manufacturing has reshaped Egypt’s trade flows:
- Imports of finished mobile phones dropped from USD 1.8 billion in 2020 to just USD 54 million in 2024.
- Imports of components surged, feeding Egypt’s expanding assembly lines.
This transformation is a result of the “Egypt Makes Electronics” initiative, which increased tariffs on finished smartphones while reducing taxes on imported parts to promote domestic manufacturing.
Economic Factors Supporting Local Assembly
Macroeconomic conditions have reinforced Egypt’s transition to local smartphone assembly:
- The Egyptian pound depreciated from under EGP 20/USD in 2022 to over EGP 50/USD in 2025, making imports costlier.
- Inflation, which spiked during the 2022–2024 crisis, is projected to average 6.5% between 2025 and 2031.
- GDP growth is forecast to average 4.3% during the same period.
These trends create a stable but price-sensitive market, with demand for low-cost smartphones under USD 150 expected to surge.
Challenges Ahead
Despite strong momentum, Egypt’s handset industry faces challenges:
- Supply chain bottlenecks and customs delays.
- Foreign exchange shortages are impacting production.
- Low rural incomes are restricting smartphone penetration in remote areas.
- Geopolitical risks, including Red Sea shipping disruptions and regional instability.
Egypt’s Future as a Regional Electronics Hub
Despite constraints, Egypt is increasingly positioning itself as an electronics hub for Africa and MENA. Policymakers and industry leaders are seeking foreign investment, with reports suggesting Apple has been approached about iPhone assembly in the country.
If Egypt can close its production gap, improve efficiency, and strengthen competitiveness, the sector could:
- Meet domestic demand
- Expand exports
- Advance digital inclusion
- Boost the national economy
Key Takeaways
- Egypt’s handset market will double by 2031 to USD 4.8 billion.
- Local assembly has cut phone imports drastically.
- Samsung, Oppo, Vivo, Xiaomi, and Nokia are active in local production.
- Demand for budget smartphones under USD 150 is growing.
- Challenges remain, but Egypt is on track to become a regional electronics hub.
