{"id":606955,"date":"2023-09-24T00:00:00","date_gmt":"2023-09-24T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/is-egypt-becoming-a-regional-hub-for-smartphone-production-part-i\/"},"modified":"2023-09-24T00:00:00","modified_gmt":"2023-09-24T00:00:00","slug":"is-egypt-becoming-a-regional-hub-for-smartphone-production-part-i","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/is-egypt-becoming-a-regional-hub-for-smartphone-production-part-i\/","title":{"rendered":"Is Egypt becoming a regional hub for smartphone production? Part I"},"content":{"rendered":"

The local smartphone industry is picking up steam: <\/strong> We\u2019ve come a long way since the first locally manufactured smartphone made its debut on<\/a> the market in 2018<\/a>, courtesy of Egyptian electronics firm Sico Technology. The government has been working over the past several years to localize the country\u2019s electronics manufacturing industry, launching a number of measures and incentives including the Information Technology Industry Development Agency\u2019s (ITIDA) Egypt Makes Electronics<\/a>(EME) initiative, the elimination of development fees for imported smartphone components, and tech parks. In response to an improved industrial climate, several multinational phone makers have hit the local scene. In the first part of this two-part story, we\u2019ll take a look at the players shaping the industry and what we\u2019ve achieved so far. <\/p>\n

The newest manufacturer on the block: <\/strong> Chinese electronics company Xiaomi has completed the construction of a factory in Sixth of October City and is working on some final touches, Diaa El Shaarawy (LinkedIn<\/a>), Chief Operations Officer at Al Safy Group<\/a> \u2014 Xiaomi\u2019s local distributor<\/a> \u2014 told Enterprise. The factory has been in the works for nearly a year and could be officially inaugurated as soon as next month, a private sector source familiar with the matter told us. Details about the factory\u2019s cost and capacity are under wraps until the inauguration, which will bring together governmental delegations from Egypt and China alongside representatives of Xiaomi and Al Safy Group, said El Shaarawy. However, local media had reported in February that the factory would cost at least EGP 1 bn<\/a>.<\/p>\n

Egypt-made Xiaomi phones have been on the market for over a month: <\/strong>Xiaomi started selling the Redmi 12C<\/a> \u2014 the only product it currently manufactures locally \u2014 to Al Safy at the beginning of August, our private sector source told us. <\/p>\n

Exports are in the cards: <\/strong>The company wants to kickstart its operations here by meeting local demand for Xiaomi phones and plans to export phones and smart displays to other markets in the Middle East and Africa at a later stage, El Shaarawy said, adding that the company sees Egypt as a strong \u201cstarting base\u201d for exports to the region.<\/p>\n

Business as usual: <\/strong> \u201cXiaomi didn\u2019t sign any agreements with ITIDA before setting up a factory here, which means the business environment is mature, and it\u2019s becoming business as usual for smartphone manufacturers to start local production,\u201d said a source at ITIDA. \u201cOur aim is to attract investors in electronics manufacturing and design in Egypt and some companies go directly to the General Authority for Investment and Freezones (GAFI) and begin procedures to set up a factory at any of a number of well-known industrial areas, such as the Tenth of Ramadan or the 15th of May.\u201d<\/p>\n

Xiaomi is following in the footsteps of a handful of phone makers. <\/strong>Below is a list of all the other international and local players taking their phones to market: <\/p>\n

#1- South Korean electronics giant Samsung <\/strong> last month received the golden license<\/a> to establish a mobile phone factory<\/a> at its industrial complex in Beni Suef. The company started manufacturing smartphones<\/a> here last year using resources at its USD 270-mn TV and tablet factory.<\/p>\n

#2- Chinese phone manufacturer Vivo <\/strong>began producing phones here in June 2022, six months after it started building its factory in the Tenth of Ramadan City, CEO Alex Zhan told us. The company started out with models Y21A and Y33A before moving on to other models in the Y and V series. It currently produces around 2 mn phones per year, Zhan said.<\/p>\n

#3- Finnish phone maker <\/strong>HMD Global<\/a><\/strong>, also known as Nokia, last year started using Etisal for Advanced Industries\u2019 (EAI) factory in Sixth of October City to assemble 1 mn mobile phones<\/a>. The company said<\/a> in March that it plans to significantly increase its production capacity in Egypt and start exporting phones to North Africa this year.<\/p>\n

#4- <\/strong> Chinese firm Oppo <\/strong>signed an agreement<\/a> with ITIDA last year to build a USD 20 mn mobile phone factory in Egypt with a production capacity of 4.5 mn phones annually. The company is expected to bring the factory online in H1 2024, our source at ITIDA said.<\/p>\n

#5- Homegrown electronics company Sico Technology <\/strong>debuted<\/a> the country\u2019s first locally manufactured smartphone on the market back in February 2018. In addition to Sico phones, the Sico factory produces phones for Chinese companies Infinix<\/a>, Itel<\/a>, and Benco<\/a>, Indian company Lava<\/a>, and France-registered company Ace<\/a>, CEO Mohamed Salem told us. The company produces smartphones, feature phones, and tablets.<\/p>\n

#6- Chinese smartphone company Infinix <\/strong> in 2020 started manufacturing phones<\/a> at Sico\u2019s factory in Assiut\u2019s tech zone.<\/p>\n

Quick figures: <\/strong> Samsung, Vivo, and Nokia have so far invested a combined EGP 2 bn to set up their factories, which have a total production capacity of 20 mn mobile phones and tablets annually, according to a CIT Ministry statement<\/a>. Xiaomi sold 1 mn phones in the local market during 2022 \u2014 before it started local production \u2014 according to El Shaarawy.<\/p>\n

IN PART TWO- <\/strong> We\u2019ll get into why all these companies decided to set up shop in Egypt and what the road ahead looks like for smartphone producers. <\/p>\n

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Your <\/strong> top industrial development stories for the week: <\/strong><\/p>\n