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Mobile Phones in Vietnam

Vietnam Mobile Phones Market: New insights

The technological boom in Vietnam, with the rise of affordable 3G and free mobile text and call applications such as LINE and Viber, greatly contributed to the rising popularity of smartphones. Although feature phones are much cheaper in terms of unit price, consumers are increasingly willing to purchase smartphones, which are considered to offer greater convenience and functionality. With the abundance of free mobile applications, smartphone users can use their phones for a range of purposes.

Despite economy difficulties, smartphones became the popular choice for many consumers even though the price was more expensive than feature phones. Firstly, multi-functions became the most important factor when consumers purchased their phones. Compared to feature phones, smartphones allowed consumers to do many things such as reading newspapers, checking email and playing games. Secondly, increasing number of smartphones became more available in term of prices and designs. It was easier and more flexible for consumers to choose smartphones which were suitable to their needs. Lastly, the 3G network developed rapidly and strongly in Vietnam towards the end of the review period. Therefore, consumers easily signed up for 3G at the affordable price. Many consumers, especially the young population, preferred to use communication applications on smartphones such as Viber or WhatsApp as it helped them to save costs. All these reasons led to increasing demand for smartphones and decreasing consumer interest in feature phones during 2012-2013.

In 2012, Nokia Corp led mobile phones with volume share of 44%, despite its declining volume share over the review period. The company also held the leading position for feature phones with a volume share of 52% in 2012. Nokia Corp was able to secure its leader due to its long-established brand name. Nokia was one of the earliest entrants to mobile phones, together with being continuously active in terms of marketing and advertising, the company managed to maintain a trusted brand name in Vietnam. Together with Research in Motion Ltd, Nokia Corp lost its share to other companies that had the Android operating system such as Samsung Vina Electronics Co Ltd, and Sony Electronics Vietnam Ltd as a result of the rising popularity of Android and iOS operating system.

Mobile phones is expected to record a retail volume CAGR of 8% over the forecast period, which is much slower than that of the review period. This will be mainly due to the fact that mobile phones have reached maturity. The penetration of mobile phones was already quite high towards the end of the review period. Therefore, the category is expected to slow down as expansion to rural areas will not be as quick to compensate for the slowing down performance in mature areas.

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