Vietnam telcos slipped up on iPhone timing: analysts

With iPhone sales remaining sluggish, analysts say local wireless carriers did not choose the right time to launch the product in Vietnam.

Telecom giants Vinaphone and Viettel began selling the iPhone on March 26, two months after they first tried to kick-start the market by announcing deals with Apple Inc., the phone producer, and promising attractive prices.

Both companies declined to disclose sales figures so far, saying sales have lived up to expectations but they wanted to keep the information confidential for now. Thu Dung, a representative of military-run Viettel, said her company plans to announce the sales around May 10.

But a source told Thanh Nien that in 20 days since the iPhone officially hit the local market, sales at both companies were between 5,000-6,000 phones, or no more than 300 units per day. The figure is very low considering up to 120,000 people had registered with Vinaphone and Viettel to buy the new product.

Analysts said the plan to distribute the iPhone officially did not work out well because local carriers were not able to convince consumers. Phone users were disappointed because prices offered by Viettel and Vinaphone were not much lower than unofficial unlocked iPhones which have been brought into the country and sold widely for a long time.

The timing to sell the phones was not right either, analysts said. When it was released in mid 2008, the iPhone 3G was a game-changing gadget as it supports faster 3G data speeds. But since then, many models have been manufactured and consumers have a wide range of products to choose from. As a result, bringing the iPhone into Vietnam now was not really meaningful, analysts said.

They also said 3G services, available in Vietnam since late last year, are still limited and cannot help encourage sales of the iPhone in the country.

‘Bitter pill’

Another wireless carrier, MobiFone, has delayed its plan to sell the iPhone in April.

“We will join the iPhone market in Vietnam,” said Dinh Viet Hung, marketing manager at MobiFone, rejecting speculation that the firm wants to back out after seeing Vinaphone and Viettel struggle with sales.

MobiFone will offer better prices and after sales policies, Hung was quoted by Saigon Tiep Thi newspaper as saying on Monday. The iPhone is a luxury product and thus MobiFone will focus on the high-end customer segment, he said.

Vinaphone and Viettel have also said they plan to adjust their retail polices to boost sales but it’s unlikely that they can cut prices due to conditions in their contracts with Apple. The carriers are charging up to VND26 million (US$1,370) for an iPhone with a two-year contract.

The iPhone deal was a bitter pill to swallow for all three local telecom giants, said an insider who asked not to be named.

When they negotiated with Apple, they were each told that they would be the exclusive iPhone seller in Vietnam, he said. It was not until the firms announced their deals to sell the phone that they learnt Apple had been playing the same tune to all of them, he said.

He said each company was contracted to purchase at least 100,000 iPhones, but the condition needs to be reconsidered considering Apple went back on its word about exclusive rights.

Unofficial iPhone sales at local shops have not been affected much by Viettel and Vinaphone’s official distribution of the phone, sellers said.

Dang Quoc Tuan, owner of iShop in Hanoi, said the number of customers fell sharply at first when the wireless carriers started promoting their sales of the iPhone by promising low prices.

But things returned to normal as soon as customers realized that the official prices were high and that the contracts included strict conditions, Tuan said.

An electronics gadget shop in Ho Chi Minh City’s District 1 said sales had not changed since Viettel and Vinaphone began selling the iPhone. Local consumers prefer unlocked iPhones sold without contracts, as long as they trust that the shop is selling authentic products.

Unlocked iPhones are sold widely in the country for up to US$1,000 per unit.

Tags: iPhone distribution in Vietnam, Mobifone, Vietnam Telecom, Viettel, Vinaphone