{"id":663692,"date":"2025-04-13T00:00:00","date_gmt":"2025-04-13T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/smartphone-customs-are-fueling-the-governments-localization-drive\/"},"modified":"2025-04-13T00:00:00","modified_gmt":"2025-04-13T00:00:00","slug":"smartphone-customs-are-fueling-the-governments-localization-drive","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/smartphone-customs-are-fueling-the-governments-localization-drive\/","title":{"rendered":"Smartphone customs are fueling the government\u2019s localization drive"},"content":{"rendered":"

The local <\/strong>smartphone <\/strong>industry <\/strong>continues <\/strong>to pick up steam: <\/strong>The customs duties brought into force by the government on imported smartphones earlier this year are fueling demand for more affordable, locally manufactured options, giving a boost to longstanding efforts to localize the smartphone industry. Manufacturers are responding swiftly, with existing players ramping up production while new entrants prepare to join the market.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to external sources.)<\/p>\n

ICYMI- <\/strong>The government started applying a customs duties and taxes rate of <\/a>37.5%<\/a><\/a> on imported smartphones on 1 January. While the rate has existed for years<\/a>, it is now being strictly enforced through a mandatory registration system called Telephony introduced to establish better control over the smartphone market and combat smuggling.<\/p>\n

A sweeping glance at the market:<\/strong> Xiaomi, Nokia, Infinix, Micromax, and Vivo have invested a combined USD 87.5 mn<\/a> in the local market, command a cumulative annual production capacity of 11.5 mn smartphones, and have created 2k jobs. Other players<\/a> include Chinese firm Oppo and homegrown electronics company Sico Technology.<\/p>\n

Local players are doubling production: <\/strong>Five local manufacturers have doubled their combined output over the past three months to 110k phones, a senior government source told EnterpriseAM. Most of these \u2014 some 80k devices \u2014 were exported. Nonetheless, \u201cunprecedented quantities\u201d are being released into the market at price points that meet local income levels and demand, they explained.<\/p>\n

And more phone makers are planning to set up shop here, including China\u2019s Realme,<\/strong> which is set to begin manufacturing in Egypt by June, Cairo Chamber of Commerce\u2019s mobile division head Mohamed Talaat told us. A total of three or four companies plan to enter the local smartphone industry, including Chinese and US firms, he said.<\/p>\n

iPhone loyalists could have reason to rejoice:<\/strong> Apple is in talks with the government to manufacture iPhones here, a source with knowledge of the matter told us. The tech giant has shown interest in the project in light of the new customs policy as well as the Trump administration\u2019s newly announced tariffs, the source said.<\/p>\n

Samsung is also stepping up its game: <\/strong>South Korean electronics giant Samsung\u2019s new mobile phone factory is set to come online in 2H 2025, further boosting the country\u2019s production capacity, a source at the company told EnterpriseAM. The company is currently prioritizing domestic demand over exports until the new plant begins production, the source said.<\/p>\n

REMEMBER- <\/strong>Samsung in 2023 received the golden license<\/a> to establish a mobile phone<\/a>factory<\/a> at its industrial complex in Beni Suef. The company started manufacturing smartphones here last year using resources at its USD 270-mn TV and tablet factory.<\/p>\n

Authorities are tightening their grip on customs enforcement: <\/strong>Customs checkpoints at airports and ports are operating around the clock to monitor and enforce the new customs policy, alleviating concerns about the policy\u2019s implementation, our government source said. Owners of newly imported phones get a three-month grace period to register their devices and pay the relevant duties. The goal is to clamp down on smuggling, which previously accounted for over 90% of the phones entering the country and cost the state some EGP 5-6 bn annually.<\/p>\n

The EGP\u2019s decline over the past couple of years has also been fueling demand for local <\/strong>alternatives<\/strong>, Talaat said, adding that the price differences between locally manufactured and imported phones reach up to 45%.<\/p>\n

Made-in-Egypt phones are going global: <\/strong>Locally assembled devices are now on display in international trade shows, including in Dubai and other regional and global markets, Talaat noted. This, he said, highlights the importance of the industry not only in meeting local demand but also in enabling Egypt to export its products.<\/p>\n

And US customs tariffs could accelerate further investments in the sector<\/strong>, complemented by the government\u2019s offering of land allocation incentives and streamlined procedures, Talaat said, adding that he expects the industry to grow significantly both in scale and quality.<\/p>\n

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