diff --git a/backend/app_controller.py b/backend/app_controller.py
index 587c049..84ee02f 100644
--- a/backend/app_controller.py
+++ b/backend/app_controller.py
@@ -300,8 +300,17 @@ class AppController:
             # Lazy-import heavy local transcription dependencies
             global RealtimeTranscriptionEngine
             if RealtimeTranscriptionEngine is None:
-                from client.transcription_engine_realtime import RealtimeTranscriptionEngine as _RTE
-                RealtimeTranscriptionEngine = _RTE
+                try:
+                    from client.transcription_engine_realtime import RealtimeTranscriptionEngine as _RTE
+                    RealtimeTranscriptionEngine = _RTE
+                except ImportError:
+                    # Cloud-only sidecar -- local engine not available
+                    self._set_state(
+                        AppState.ERROR,
+                        "Local transcription not available in this build. "
+                        "Please switch to Cloud (Deepgram) mode in Settings."
+                    )
+                    return
 
             if self.device_manager:
                 self.device_manager.set_device(device_config)