Recession hits mobile market due to high prices, supply shortage

The mobile market is suffering from a state of stagnation due to a significant increase in prices and the shortage of supply of devices, due to the stoppage of imports and the high exchange rate of the dollar.

Walid Ramadan, deputy head of the Chambers of Commerce’s Mobile and Communications Division, said mobile phone prices had risen at roughly the same rate as the pound’s price against the dollar.

Ramadan told Daily News Egypt that the mobile market is suffering complete stagnation due to the doubling of the price of mobile phones, in addition to the lack of supply of mobile devices.

Ramadan explained that the volume of locally manufactured mobile phones does not cover the volume of demand in the local market and does not contribute to lower prices due to the import of components, whose prices have increased due to the high price of the dollar.

Mobile phone sales in Egypt recorded more than 15 million phones in 2021, according to research institution GFK, up from 13.3 million phones in 2020.

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The value of Egypt’s mobile phone imports decreased by 50.7% to $299.1 million during the first four months of this year, compared to $607 million in the comparative period a year earlier.

Ramadan believes that the mobile market in Egypt is experiencing the same scenario as in 2016, when Egypt liberalized the exchange rate of the pound against the dollar in November of that year, which caused a significant increase in mobile phone prices, followed by a state of stagnation for a period of time.

Ramadan said that mobile phone dealers are in a very bad situation, due to the recession that has hit the market, in addition to the difficulty in providing goods.

He believes that the state is trying, through the “Egypt Makes Electronics” initiative, to localize the mobile phone industry, and has provided industrial incentives to companies, but the consequences of the Russian-Ukrainian war and the resulting supply chain crisis The coronavirus pandemic still casts a shadow over the Egyptian market.

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Four companies have announced their intention to manufacture their products locally in Egypt, starting with China’s Vivo, one of the Chinese companies of the BBK group, which opened its factory on an area of ​​11,000 square meters on the tenth of Ramadan, with an investment of 20 million dollars and increasing to about 30 million dollars in a year, with a production capacity close to 2 million phones.

In August, Etisal for Advanced Industries (EAI) announced its agreement with HMD, owner of the former “Nokia” brand, to manufacture about one million phones a year in the Egyptian market.

In September, the Chinese company, OPPO, announced its intention to establish a mobile factory in Egypt, with an investment of 30 million dollars and an annual production capacity of 4.5 million phones. Thus, the company’s factory in Egypt is one of the company’s 10 factories worldwide.

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Samsung manufactures some of its mobile devices at its factory in Beni Suef during a trial period.

For its part, a source from the mobile market said that the market is suffering from the impossibility of providing mobile devices due to the suspension of imports.

The source, who preferred not to be named, explained that importation has been suspended since last March, and even recovery periods in the introduction of imported goods did not include an adequate amount of mobile shipments, resulting in a shortage of products. available in the market.

He added that the rise in the price of the dollar, the difficulty of saving it and the cessation of imports caused the prices of mobile devices to double, pointing out that most of the devices available in the market did not enter normally through importers.

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