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Vietnam Mobile Phone Industry Rolls in Good Times Despite Inflation

Wednesday, November 23rd, 2011

After the internet, mobile technology likely has the fastest technology adoption rate. A recent research study by leading analysts Gfk Asia supported this fact. The market research giant’s report showed a surprising growth in the mobile industry in Vietnam, despite the rising inflation there. Though there was a drastic cut in spending, even on food, the mobile industry surprisingly showed a continued to growth of 27 percent in unit sales and 21 percent value gain in both feature phones as well as smartphones.

Inflation Hits Consumer Spending

As in the case of all inflation-hit economies in the past year, Vietnam too has had declining sales in different market segments. Worst hit were the food industry, IT industry, home appliances, electronic gadgets and almost all other sectors, whether directly or indirectly, with the surprising exception of the mobile phone sector, which continues to see greater spending.

Mobile Usage Dominates

The total population of Vietnam is about 82 million, with mobile-phone users totalling approximately 5.3 million. This number is likely to increase to 7.3 million by the end of this year.

The average price of a smartphone in Vietnam is about US$300, almost five times that of a feature phone, which cost around US$66. Statistics show, however, that every 1 in 10 mobile phones purchased this year was a smartphone, and their share in overall market grew by 10 percent to 34 percent.

Analysts Track Growth Reasons

In past year and more, various market analysts having been tracking the growth of the mobile industry. All reports point to a massive adoption of mobile technology by Asian and South East Asian countries, especially Indonesia, Malaysia and now Vietnam, due to three reasons:

  1. Technologically faster networks. 3G is the main driving force in this regard. It is easier for users of these regions to access mobile devices than via trusted fixed telephones.
  2. The downward spiral of data costs.
  3. Low-cost, high feature web-usable mobile handsets.

Mobile Industry Growth Statistics

The report highlights the individual growth rates of two categories of mobile phones – smartphones and feature phones. However, smartphones seem to dominate, with over 70 percent more units sold this year in comparison to last year.

The smartphone industry in this region presents very high growth potential for the future. More competition is expected in the marketplace due to an increase in the number of manufacturers. This is likely to benefit consumers, with greater choice of smartphone brands along with competitive pricing as well.

Current High Spending on Mobiles will Continue

Though inflation has severely affected Vietnam’s economy, the consumption of smart and feature mobile phones will persist. This is because of the value-for-money factor these devices provide, as well as their superior technology.

Along with innovative apps, these mobiles provide entertainment, business-handling opportunities and connectivity on a single device. They make life simpler, faster, and along with the great user-experience they offer, the adoption rate of mobiles is on the increase and hence the growing sales in mobile units.

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