Vietnam Keeps Producing Its Own Smartphones, So Why Don’t They Sell?

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Employees assist customers at a service counter in a Thegioididong.com store, operated by mobile ... <+> World Investment Corp., in Ho Chi Minch City, Vietphái nam, on Sunday, June 10, 2018. When thiết bị di động World Chairman Nguyen Duc Tai, the son of a street vendor, said he was going lớn revolutionize Vietnam"s mobile phone industry, few people gave sầu it a second thought. But he was true to lớn this word. His Smartphone World became the country"s top seller of mobile phones and one of the biggest listed stocks. Photographer: Maika Elan/Bloomberg

Made-in-Vietphái nam phones make sense economically. The country dependent on factory work for the past 30 years is moving up the value chain inlớn electronics. điện thoại cảm ứng thông minh developer Samsung Electronics has invested $17.3 billion in Vietnam-based factories, for example. Public schools emphasize science. University graduates who work for a foreign tech firm will know all the more about how to make a phone.

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Vietnamese companies have come out with a các mục of their own phones, mostly cheaper Android models. The QPhone and BPhone were among the first. Now a subsidiary of the Ho Chi Minc City-based conglomerate Vingroup is selling a brvà of handphối called the Vsmart for about $100.

Trouble is, most Vietnamese don’t buy phones developed in their homel& because they can get more recognized foreign brands for around the same prices.

Foreign brands hold higher status than local equivalents, says Maxfield Brown, senior associate with the business consultancy Dezan Shira và Associates in Ho Chi Minc City. “The trajectory for consumer demvà in Vietnam for electronics is currently trending toward an interest in international products and I would expect it khổng lồ continue as consumer spending rises,” he says. Wages are rising in Vietnam though still as low as $171 a month.


Brief history of made-in-Vietphái nam phones

Vietnamese tech firm Bkav Corp. developed some of Vietnam’s first smartphones in 2017. Its Bphone và Bphone 2 models got poor đánh giá, news trang web việt nam net Bridge reports. They sold a combined 12,000 units, the news outlet says. Company CEO Nguyen Tu Quang acknowledged losses but described a vision to become the “Apple or Samsung of Vietphái nam.”

The $314 Bphone 3 released last year won praise among muốn experts for its processing tốc độ and water resistance, the October news report says.

However, electronics stores in a busy section of downtown Ho Chi Minch City weren’t carrying any Bphones earlier in the month. Vendors said they didn’t know where a shopper would find one. Vietnamese firms Masstel and Mobiistar have sầu launched phones, too. But phones by foreign brands such as Oppo, Samsung & Sony turn up more often today in the downtown electronics stores.


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Home-grown smartphones made up no more than 1% of the total sold in Vietphái mạnh this past quarter, says Thanh Vo, senior market analyst with the tech retìm kiếm firm IDC. That figure had hit 5% over the previous 15 months. Samsung has a 42.8% chia sẻ of Vietnam’s smartphone market, followed by Oppo at 23.2% và Xiaomi at 6.5%, the IDC analyst says.

The Vingroup subsidiary VinSmart aims to lớn turn those stats around. Since 2017, it has sold about 300,000 Vsmart smartphones across 5,200 stores. Its existing factory can produce 25 million per year và it’s building another that can trang điểm khổng lồ 100 million, Vingroup’s investor relations office says for this report. Some could kết thúc up overseas.

Vsmart had signed a khuyến mãi in July with BQ of Spain khổng lồ start selling four smartphone models under the Vsmart brand in December, the Vietphái nam Investment Đánh Giá reports. Quality will matter, Vingroup’s IR office says. “Vsmart is following the strategy of diversifying hàng hóa lines in different market segments, focusing on the higher chất lượng of the product than others in the same segment,” it says.

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Vingroup, chaired by Vietnam’s richest person Pmê mệt Nhat Vuong, posted 2018 revenue of VND122 trillion ($5.26 billion) & a VND6.2 trillion profit.

“Vingroup is an interesting company,” says Mike Lynch, managing director with SSI Institutional Brokerage in Ho Chi Minch City. “If they want khổng lồ get into something, they’ll get inlớn it. He describes Vsmart phones as based on a technically acceptable Chinese “reference design” for local manufacturing. “I wouldn’t be averse lớn buying one of their phones,” Lynch says.

Newly moneyed consumers want a shot at foreign brands first

Analysts in Vietphái mạnh liken the pro-foreign-brand smartphone trkết thúc in Vietphái nam to one that Chinese that consumers started two decades ago as their income rose. They went first for foreign food, wine & electronics, Brown says, but later swung back to lớn domestic brands. Chinese consumers still buy foreign goods they consider to be of higher chất lượng và not counterfeit, Practical Ecommerce magazine reports. But where quality is more certain, Chinese consumers may show patriotism by shopping local. Chinese điện thoại thông minh developers Huawei, Oppo và Xiaomi sell largely lớn the domestic market.

“I can see something similar happening in Vietphái nam,” Brown says. “I would expect to lớn see a trend back khổng lồ domestic products as consumers begin to lớn rally around national sentiment.”

The dominant foreign điện thoại thông minh brands also sell at prices low enough to lớn keep money-conscious Vietnamese consumers buying. Consumers “prefer the price rather than the origin of brands,” Tkhô hanh Vo says. “It means that if the brand can offer the cheapest price for a good quality, they will be purchased.” Shoppers are looking for quality in the battery, camera, screen & operating system, he adds.

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Motorcyclists ride past an advertisement for the Samsung Electronics Co. Galaxy S7 Edge smartphone ... <+> outside the Samsung Electronics Vietphái mạnh Co. Plant at Yen Phong Industrial Park in Bac Ninc Province, Vietphái nam, on Thursday, Sept. 1, 2016. Samsung and its affiliate have sầu built a factory town with 45,000 young workers và hundreds of foreign component suppliers -- a miniature version of the family-run chaebol conglomerates that dominate business baông chồng in Korea. The investment has been a windfall for businesses in Bac Ninc -- almost 2,000 new hotels & restaurants opened between 2011 và năm ngoái according to the provincial statistics office -- helping raise the province"s per capita GDP to three times the national average. Photographer: Linc Luong Thai/Bloomberg

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As a news reporter I have sầu covered some of everything since 1988, from my alma mater U.C. Berkeley lớn the Great Hall of the People in Beijing where I followed Communist officials for the Japanese news agency Kyovì chưng. Stationed in Taipei since 2006, I traông chồng Taiwanese companies & local economic trends that resonate offshore. At Reuters through 2010, I looked intensely at the island’s awkward relations with Đài Loan Trung Quốc. More recently, I’ve sầu studied high-tech trends in greater Đài Loan Trung Quốc và expanded my overall news coverage khổng lồ surrounding Asia.