Egypt’s smartphone market was down 73.4% year-on-year in Q3 2022 to just 0.8 million units, with shipments shrinking to less than one-third of their size in Q3 2021.

This is according to newly-released data from the IDC's Worldwide Quarterly Mobile Phone Tracker which shows that this large decline resulted from several restrictions imposed by the government on mobile phone imports during the year.

The IDC says the first intervention came as a new 10% import tariff was implemented on mobile phones in November 2021. This was followed in February 2022 by a requirement for all import payments to be conducted via letters of credit (LCs).

“Since March 2022, the government has approved a very limited number of LC requests for mobile phone imports as the devices are deemed to be non-essential goods. All of this caused severe disruptions in the market during the first three quarters of 2022,” the research firm says.

Figure 1: Egypt Smartphone Market – Total Shipments Per Quarter.

In order to serve the market without being impacted by the restrictions, Transsion, Vivo, Nokia, and Samsung resorted to local assembly and have already established local production facilities. Vivo and Samsung opted to set up their own assembly lines, while Transsion and Nokia are cooperating with local manufacturers in Egypt.

"More brands are aspiring to join the local assembly initiative in Egypt, thanks to promising country dynamics and the large size of the population," says Taher Abdel Hameed, a senior research analyst at IDC. "These brands are eyeing developments in two other markets in the region where a transition to local production has already occurred, namely Turkey and Pakistan. While these two mobile phone markets are now dominated by local assembly, it is too early to call the initiative a success due to the challenging economic situations in both countries."

Samsung led the way in Egypt's shrinking smartphone market in Q3 2022, with 26.0% unit share, followed by Xiaomi in second place and Infinix in third. Notably, Vivo entered into the top five vendor rankings for the first time in Q3 2022 thanks to the local production of its devices.

The IDC expects Egypt's smartphone market to bounce back from the turmoil of 2022 to total 8.8 million units in 2023.

"Egypt is a large and dynamic market with a promising outlook despite the current challenges," says Ramazan Yavuz, a senior research manager at IDC. "The market will recover in 2023 as the local assembly initiative gains momentum and the government eases its restrictions."