REPUBLIKA.CO.ID, HANOI - Communist Vietnam is suddenly Apple Inc's hottest market after its sales growth tripled in the first three months of the year, a rate five times faster than in India where it is spending heavily in a battle for market share.
Vietnam has barely received a mention from Apple executives in their regular briefings for financial analysts. But in a quarterly conference call on Wednesday, they were talking up the potential of the country.
Quarterly iPhone sales more than doubled and the strong growth appears likely to continue given Vietnam's predominantly young, tech-savvy population, rapid growth in internet and mobile phone use and a projected doubling of the middle class by 2020.
Vietnamese tech firms are fast cropping up, churning out apps such as Flappy Bird, which rose from obscurity to become one of the world's most downloaded mobile games. Young Vietnamese thronging stores to buy iPhones worth up to half of their country's 2012 gross per-capita income say it's worth it.
"This cost more than two months worth of my salary," said officer worker Pham My Linh (23 years) moments after agreeing a payment plan for an iPhone 5. "But I need it, to feel more confident when hanging out with friends and colleagues."
The surge in demand comes against a backdrop of sluggish economic growth exacerbated by high levels of bad loans and business closures. The economy grew 5.4 percent last year, a rate economists see as underwhelming given Vietnam's fast population growth and its retail and manufacturing potential.
But Vietnamese smartphone sellers say a hunger for higher social status is driving Apple's sales, helped by price cuts and payment plans that make it easier to digest handset prices that exceed the monthly income of most urbanites.
The growing thirst for slick technology is not just benefiting Apple, but most firms offering tablets and smartphones, among them HTC and Samsung. Slower growth for standard mobile phones shows local appetite for upgrades to trendier handsets, industry experts say.
"I've seen no signs of an economic recession in this shop," said the manager of a Hanoi branch of FPT, Vietnam's biggest listed tech company. "People buy 1,000 USD items with ease and a family buying three iPads isn't uncommon."
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