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Southeast Asia may be Apple's next growth driver as sales soar in Vietnam

post #1 of 23
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Status-conscious consumers in Southeast Asian nations like Vietnam -- where iPhone sales doubled in the most recent quarter -- are snapping up Apple products in record numbers in an effort to "build a luxury image."

A Vietnamese Buddhist monk films an event with an iPad | Source: Reuters
A Vietnamese Buddhist monk films an event with an iPad | Source: Reuters


"This cost more than two months worth of my salary," 23-year-old Vietnamese office worker Pham My Linh told Reuters when purchasing an iPhone 5. "But I need it, to feel more confident when hanging out with friends and colleagues."

The sentiment is similar to those expressed by consumers in other developing Asian nations like China, where Apple's handset was almost single-handedly responsible for driving early adoption of China Mobile's new 4G network.

Apple has been seen as an aspirational brand for less-affluent Asian consumers who are often willing to go into debt or sacrifice in areas such as housing in exchange for the more public display of prosperity that comes with owning one of the company's instantly-recognizable products. That view is backed up by the company's recent sales boom in Vietnam, one of the poorest countries in the region.

In three of Apple's fastest-growing markets -- India, China, and Vietnam -- the highest per-capita income is China's $5,720, with India and Vietnam clocking in at just $1,550 each. That means that the $649 unsubsidized cost of a 64-gigabyte iPhone 5c can set buyers back 40 percent or more of their yearly salaries.

For those who are unable or unwilling to purchase an iPhone, Reuters notes that knockoff iPhones that sell for as little as 2 million Vietnamese dong ($95) are an easy substitute.

"There are a lot of people out there who can't afford an iPhone but still want to look rich, which is why shops like mine can do well," shop owner Nguyen Duc Hai said. "Why pay 10 times more for a real iPhone just to build a luxury image and show off?"

Apple has been steadily stepping up its efforts in Southeast Asia as demand grows. The company recently brought back its Indonesian store, for instance, and runs yearly "Red Friday" sales in China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan and Thailand which bring discounts in advance of lunar new year.
post #2 of 23
Android lovers are gonna feed on that line.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #3 of 23

well, you have to be pretty young to think that a 200 to 500 dollar phone made in China is a luxury item - or live in a 3rd world country I guess.

post #4 of 23

A lot of analysts in the US think that everyone in Asia is poor.  They've totally misjudged the huge market for luxury goods like Apple products in Asia.  Guess what?  Status conscious people want exactly the same stuff there than they do in every other wealthy country.  And Asia is the future and present of wealth and growth.  This is why Apple is currently taking Android down a peg.

post #5 of 23
No shit. Apple has known this for a while. Analysts are just figuring this out? Here's your growth right here.
post #6 of 23
Quote:
Originally Posted by 512ke View Post

A lot of analysts in the US think that everyone in Asia is poor.  They've totally misjudged the huge market for luxury goods like Apple products in Asia.  Guess what?  Status conscious people want exactly the same stuff there than they do in every other wealthy country.  And Asia is the future and present of wealth and growth.  This is why Apple is currently taking Android down a peg.


 



Samsung have their stores in Vietnam but you almost never see their branding in privately owned electronic shops. However, Apple's logo is shown prominently in every electronic shop.

Yup totally agree. If you look at numbers like per-capitalincome for third world countries, you left scratching your head on how they can afford to purchase something that is many times higher than their monthly salary. The thing is people are pretty good at saving their money there. For example, the interest rate is so high when purchasing a home there that most people end up buying houses with cash. Imagine paying 300,000 dollars cash for a house. Most people in the States cannot do this but you see it every day over there.
post #7 of 23
For everyone's sake I hope the economic downturn in Asia this year has been overstated.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #8 of 23

So I think the first thought that people have is how sad it is that these people need to spend two months of their salary to afford an iPhone for image. Many have the tendency to discount luxury items in societies that have a lower per capita.

 

However, there is a principle at work. When members of society aspire to something greater, there tends to be an upward trend in per capita income over time. For instance, these same people who have put their necks out to afford a piece of technology, will most likely begin acting and behaving differently to achieve the new image because of the risk they have taken. What does that mean? It means that these individuals will not be satisfied with their father's occupations, and work harder to achieve the level of affluence they desire.

 

You can see this in the United States and the "Greatest Generation" where our parents and grandparents worked hard to achieve something they never had. However today, there tends to be more apathy in youth and the economic outlook for many is less. You can blame a lot of things for this, but in the end, it's that the desire for something greater than ourselves is trumped with other things such as pleasure in the moment.

 

While there isn't a direct correlation, you can also see this occur in higher education in the United States. Students that go on to college tend to have higher paying salaries. Students that aspire to Ivy League schools even more so. Now the question is, is it all educational value, or is there some psyche that is built into these aspirations?  I believe its about 50/50. There is something to be said about the social and psychological aspects of graduating from an institution.

 

So I don't believe this is money thrown away. In fact, purchasing a cheap knockoff for the "image" will actually reverse this trend. It would be like buying a degree from Oxford University online after going to community college. Do you really think the person has been changed in a meaningful behavioral sense? No. They have substituted the risk of acquiring the real thing for something that fools their friends and themselves.

post #9 of 23
Quote:
Originally Posted by AppleInsider View Post

"There are a lot of people out there who can't afford an iPhone but still want to look rich, which is why shops like mine can do well," shop owner Nguyen Duc Hai said. "Why pay 10 times more for a real iPhone just to build a luxury image and show off?".

I don't get it; if he copies the iPhone wouldn't it be a luxury item and just to show off just the same?
post #10 of 23
Quote:
Originally Posted by SolipsismX View Post

For everyone's sake I hope the economic downturn in Asia this year has been overstated.
 

 

Quite honestly, I've found so-called "mainstream news" less and less believable.

Proud AAPL stock owner.

 

GOA

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post #11 of 23
Quote:
Originally Posted by WS11 View Post
 
Meanwhile Xiaomi (who just renamed themselves Mi) are expanding into Malaysia, the Philippines, India, Indonesia, Thailand, Vietnam, Russia, Turkey, Brazil and Mexico.  For those who are unaware, Xiaomi offers devices with top of the line specifications for extremely low prices (essentially at cost) and their mid-range products cost even less.  The competition for companies such as Samsung will only increase in less developed nations.

 

http://www.mi.com/en

 

Interesting. I doubt they'll ever be able to expand into the US with their phone(s). Apple would come at them, guns blazing, with lawsuits.

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post #12 of 23
Originally Posted by SpamSandwich View Post

Interesting. I doubt they'll ever be able to expand into the US with their phone(s). Apple would come at them, guns blazing, with lawsuits.

 

Apple would sue for website and product design, Samsung would sue for product names, HTC would sue for product design…

 

But they’re so CUTE! They’ve copied Apple’s website style better than Samsung has anything else. And I was impressed by this. :lol:

 

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #13 of 23
Quote:
Originally Posted by WS11 View Post
 

Xiaomi's competition, OnePlus, will be selling their flaghip 'One' smartphone (made by Oppo) in the US for $299/$349 USD.  I'm sure within a year Xiaomi will come to the US market as well. 

 

Why would Apple sue them? For using MIUI? If Xiaomi was that concerned, they would make changes to the UI before coming to the US market.

 

They might demand they be given the same indemnification for infringement that was given to Samsung by Google.

Proud AAPL stock owner.

 

GOA

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post #14 of 23
Originally Posted by WS11 View Post
[never settle]

 

Good advice; I won’t be buying their product…

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #15 of 23
Originally Posted by WS11 View Post
Take from it what you will, but I don't think you would fit their target market.  

 

Android devices explicitly designed to be Apple product knockoffs? No, I wouldn’t imagine. :lol:

 

Check the back: “Designed by OnePlus. Assembled in China.”

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

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post #16 of 23
Quote:
Originally Posted by WS11 View Post

The OnePlus One running Cyanogenmod 11S launches on the 28th of May, if it can succeed in the US market, I would bet Xiaomi would find a way to come to the US as soon as possible, even if that means potential lawsuits.

nexusae0_032.jpg
I hope these 'at cost' devices can one day succeed in the NA market. $299 for a 16GB flagship phone ($349 for the 64GB model) with top of the line specifications has the potential of drawing consumers away from having to go on contract with carriers.  A decreased dependency on subsidized devices will allow for a more competitive market. 

The market is already competitive. This won't change a thing.
post #17 of 23
Quote:
Originally Posted by agramonte View Post
 

well, you have to be pretty young to think that a 200 to 500 dollar phone made in China is a luxury item - or live in a 3rd world country I guess.

It's all relative. To us only a yacht or private plane might be a status symbol, but if your family has only just escaped generations of subsistence existence then an expensive phone would indeed symbolize something.

post #18 of 23
2 month salary to buy a "portable computer". Totally worth it.
post #19 of 23
Quote:
Originally Posted by SolipsismX View Post

For everyone's sake I hope the economic downturn in Asia this year has been overstated.


I thought there was going to be a world recession last year. Didn't happen. I now think there's a good chance of one in 2016.
“I wasted time, and now doth time waste me.”
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“I wasted time, and now doth time waste me.”
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post #20 of 23
Quote:
Originally Posted by Benjamin Frost View Post

I thought there was going to be a world recession last year. Didn't happen. I now think there's a good chance of one in 2016.

Well, the Fed has no immediate plans to stop pumping up the US economy with free money, although the underlying fragility remains because the weaknesses and poor policy decisions remain. I'm certain there will be another giant plunge in markets and potentially a collapse bigger than 2008.

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GOA

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post #21 of 23
Quote:
Originally Posted by agramonte View Post

well, you have to be pretty young to think that a 200 to 500 dollar phone made in China is a luxury item - or live in a 3rd world country I guess.

Where a product is assembled is of little import. Apple's products are designed in the USA by some of the world's best industrial designers and assembled to meet specifications also set by the same people.
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post #22 of 23
Quote:
Originally Posted by Macky the Macky View Post

Where a product is assembled is of little import. Apple's products are designed in the USA by some of the world's best industrial designers and assembled to meet specifications also set by the same people.

It's crazy that people today think that China can't possibly have any manufacturing that could produce a quality or luxury item.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply
post #23 of 23
Quote:
Originally Posted by SolipsismX View Post

It's crazy that people today think that China can't possibly have any manufacturing that could produce a quality or luxury item.

They do make some really nice plates. lol.gif
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
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