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Vietnamese smartphone providers target local markets

According to industry analysts, upon the departure of the Vietnamese smartphones from the local market, their decline was anticipated.

The Ministry of Information and Communications (MIC) noted in a press release that the smartphone market reached a saturation point and sales had grown to be excessively slow. Along with this, the local industry had to compete with international tech giants.

Fifteen months after its debut, the provider Vsmart unexpectedly added its name to the top three brands with 16.7% of market share. The success of Vsmart has made people change their view about the potentiality of Vietnamese brands, the release claimed.

The configuration of Vsmart smartphones is strong. At the affordable rate of VN đ3 million (around US$ 130), the public can own a smartphone with a Snapdragon 675, AMOLED screen with a high-resolution level, and an integrated fingerprint security feature.

These features are usually only equipped for high-end models, which are very expensive.

According to analysts, Vsmart’s business strategy, which focuses on the mass market segment with the products being priced at VNđ 1 to 3 million (about US$ 43 to US$ 130), has been successful.

Rather than targeting the high-end segment as it initially did, another provider, BKAV, is now targeting the mid-end market segment. It’s product, BPhone 3, is the first smartphone in the mid-range to be water and dust resistant. The anti-theft feature can help find the device even after the SIM card is replaced, factory reset or if the network connection has been turned off.

The company is preparing for the launch of the fourth generation of BPhone. BKAV invested VNđ 1 trillion (about US$ 43 million) to manufacture smartphones but still could not make a profit, the company’s CEO said in March last year.

Experts have stated that there is no possibility of BKAV selling BPhone 4 at below VNđ 5 million (about US$ 215).

The high-end segment, accounting for 20% of the total mobile phone market, has been controlled by transnational tech companies.

According to one of the largest market research institutes, in the first seven months of 2019, 99% of consumers who bought smartphones priced over VNđ 15 million (about US$ 650) chose products made by Samsung or Apple.

Citizens bought 15 million smartphone products in 2019. Out of these, high-end products priced at over VNđ 10 million (US$ 433) accounted for less than 10%.

The mid-end and low-end segments are believed to be the most profitable for Vietnamese smartphone brands, the release explained.

Since the government has announced the program to popularise smartphones to 100% of the population, they have been focusing on low-cost smartphone products.

Mobile network operators, app developers, and phone manufacturers, under this programme, are asked to join forces to help lower some smartphone prices to VNđ 500,000 (US$ 20), as OpenGov reported earlier.

A Vietnamese smartphone will cost US$ 45 to US$ 50 to produce. However, with support from mobile operators and application developers, a smartphone can be sold at a lower price.

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