A cyclo driver talks on a cell phone in downtown Ho Chi Minh City. Local cell phone brands targetting the lower-end market segment are doing well in Vietnam.
Business is blooming for local cell phone brands targeting the lower-end market segment.
Handset retailers said cell phones priced at more than VND6 million (US$280) only account for around 5 percent of their total sales, while the segment under VND3 million often makes up for more than 80 percent.
The low-end product range is also where local brands are thriving.
Doan Thanh Nhan, Manager of Viettel’s cellphone chain, said Q-mobile is the bestseller among Vietnamese cell phones at her retail chain. The brand contributes up to 20 percent of Viettel’s total phone sales, she added.
Many retailers said other local brands, including F-mobile and Mobell, are also well received by local consumers. F-mobile, for instance, brought in more than VND600 billion in 2010 for FPT Corporation, a national giant in the telecom, software and technology sectors.
The early and quite unexpected success of local handset brands has bred more of them. At least three newcomers entered the market last month – CMC, HiPT and Hanel.
Even though Hanoi-based telecom and IT firm CMC has just launched the first cell phones under its brand, called Bluefone, the company has set its goal high. Nguyen Trung Chinh, general director of CMC, said he is optimistic that the phone will become one of the three topsellers in the local market.
For ABTel, the owner of Q-mobile, the plan is even more ambitious. The local company said it is trying to overtake Nokia and achieve local market domination this year. Nokia, the world’s biggest cell phone maker, now holds around half of the local market share. That compares to a 20 percent share for Q-mobile.
“Q-mobile has been the No.1 cell phone company in the mid-price segment. This year we will enter other segments including 3G phones and smartphones,” ABTel general director Nguyen Quang Minh said in an interview with the Vietnam News Agency earlier this month.
With most of the so-called Vietnamese cell phones actually coming out of Chinese factories, many people are asking whether there is really a cell phone industry in Vietnam.
Minh of ABTel said when his company brought its finished products home from China, some customs officials suspected the origin of the phones.
But Minh argued that where a product is manufactured is not important. Technology ownership and branding play a more important role, accounting for 80 percent of the product value, he said.
Bui Ngoc Khanh, General Director of F-mobile, said there is no company in the world that can churn out mobile phones on their own.
Many companies only focus on design and software development, leaving production and assembly to other firms, Khanh said. This is a shortcut that we can take to develop Vietnamese brands, he said.
F-mobile phones are produced at a factory in China, Khanh said, adding that his company also has a research and development office in Shenzhen.
Among local cell phone companies, Hanoi-based Thuan Phat Corporation is the only one that has a production plant in Vietnam. The phone maker, which launched its first product in mid-2010, invested $70 million in a factory with an annual capacity of three million units.
Thuan Phat will try to export its cell phones in the future, said general director Nguyen Thi Phuong.
Minh of ABTel said his company also plans to expand its market to Myanmar, Laos, Cambodia and some African countries.