Mobile Phone in Vietnam

Should mobile phone manufacturers confront with foreign brands or ward off?

March 6, 2012

LookAtVietnam – It is obvious that Vietnamese mobile phone brands have been

dislodged from the home market. They have lost the low-cost product market

segment and cannot squeeze into the smart phone market.

Reports all show that Nokia is still leading the market, especially after it has

regained the low-cost market segment. Meanwhile, Samsung and HTC are still

dominating the smart phone market. What should Vietnamese mobile phone

manufacturers do–competing directly or avoid the foreign big guys?

2012: Difficulties ahead

Dinh Anh Huan, Director of The Gioi Di Dong distribution chain, one of the

biggest mobile phone distributors in Vietnam, has noted that the smart phones

are in high demand in the Vietnamese market, but Vietnamese manufacturers still

cannot catch up with the new tendency.

In fact, Q-Mobile once launched a smart phone model, S10, into the market,

priced at 4 million dong. However, it could not compete with international well

known brands.

A market survey by IDC has pointed out that the Vietnamese smart phone market

would obtain the high growth rate of 51 percent in 2012. Chu Tien Dung,

President of the Quang Trung Software Park Development Company, also said at a

recent workshop that about 3 million smart phones would be consumed in Vietnam

this year.

Meanwhile, Vietnamese brands still cannot reach out to the market.

Huan thinks that the purchasing power would not increase in 2012, since the

economic difficulties still exist. This means that Vietnamese brands would meet

bigger difficulties to conquer the market. In the low-cost product market

segment, where Vietnamese brands have biggest advantages, Nokia remains a giant,

while Samsung would also jump on the bandwagon.

After Q-Mobile’s first smart phone did not succeed on the market, Samsung market

Galaxy Y, priced at less than 3.5 million dong which was described as a strong

blow dealt on the efforts by Vietnamese manufacturers to make smart phones.

Opportunities still available for Vietnamese brands to grab

It seems that Vietnamese manufacturers have no more opportunities to get a

foothold on the domestic market. The competition would be even fiercer this year

among popular product brands. Meanwhile, in order to successfully compete with

foreign giants, Vietnamese brands need to make out the products which have the

sale prices at less than 2.5 million dong. Meanwhile, the current high

accessories prices would not allow Vietnamese brands to make this realistic.

Even if the accessories prices in the world go down in the time to come,

Vietnamese manufacturers would not have opportunities. The first beneficiaries

from the price decreases would be the international manufacturers who place big

orders. Meanwhile, the manufacturers also can make some kinds of accessories

themselves; therefore, they would be able to churn out the products with high

technologies and reasonable prices.

So what should Vietnamese brands do? Ngo Nguyen Kha, Mobistar’s Director, said

that competing directly or avoiding big manufacturers would not be the way out.

He said if Vietnamese manufacturers can find reasonable niche markets, they

would be able to survive. Mobistar, for example, has marketed low-cost touch

products with associated apps, and plans to market 3D models in the near future.

These could be seen as the “pre-smart phone” series, which would pave the way

for Vietnamese brands to join the smart phone market when there are favorable

conditions.

However, Huan has warned that the pre-smart phone series should be valued at

less than 2 million dong to become competitive. Smart phone prices are on the

decrease, and it is very likely to see Android-based smart phone series, priced

at 2 million dong, to appear on the market.

Source: Lao dong