Canalys forecasts that Egypt’s smartphone market could stabilize after the implementation of new regulations aimed at addressing the long-standing issue of the grey market. These regulations, which came into effect in January 2025, required smartphones to be registered before being connected to a mobile network. This move was in response to reports from the National Telecommunications Regulatory Authority (NTRA) that around 80% of smartphones entering Egypt in 2023 and early 2024 were illegally imported, bypassing taxes.
Following the introduction of these regulations, smartphone shipments saw a notable decline of 18% year-on-year, dropping from 780,000 units in January 2024 to 642,000 in January 2025. The new rules impose a combined 38.5% in customs duties and taxes, as mandated by Egypt’s Ministry of Communications and Information Technology (MCIT) and the Ministry of Finance. The objective is to combat smuggling and boost local manufacturing.
While this transition has caused short-term disruption for consumers and vendors, Canalys views it as part of a broader strategy to stabilize and enhance the transparency of Egypt’s smartphone market. Local manufacturing is already on the rise, with the government expecting to produce up to 80% of the country’s smartphone demand domestically. The MCIT aims to increase local production from 3 million units in 2024 to 9 million by 2026, positioning Egypt as a regional manufacturing hub.
Despite the disruption, there are challenges ahead. Legally imported devices are currently 20% to 30% more expensive than grey-market counterparts, due to higher operating costs and import duties on components. Nevertheless, major vendors such as Samsung and Xiaomi have partnered with the government to set up local manufacturing operations, signaling confidence in the long-term potential of Egypt’s market.
Canalys concluded that while the market reset has created affordability concerns, the increased reliability, security, and after-sales support associated with officially imported and locally assembled devices could foster growth and recovery in the coming months.
