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Apple eyes Vietnam for gains

Products coveted by savvy youth as status symbol

– Bich Ngoc, who earns less than $60 a week and has a newborn son, cobbled together four months of savings to buy the latest iPhone so she could impress her colleagues who have older versions of the device.

“I like the iPhone because it is small, light and very delicate,” said Ngoc, a 24-year-old accountant in Hanoi who purchased the device last week. “Everyone seems a bit jealous.”

Apple is looking to consumers such as Ngoc in Vietnam and across Southeast Asia willing to spend more than two months salary on an iPhone or iPad, as it seeks sales amid competition with Samsung Electronics. Apple is tapping FPT Corp., Vietnam’s biggest listed information and communication technology company, to roll out retail outlets in major cities as part of a regional push.

“One of the biggest moves Apple is making is in Southeast Asia,” Tim Bajarin, president of technology consulting firm Creative Strategies Inc. based in San Jose, California, said in a phone interview. “If you look at the numbers, Android has passed Apple in smartphones, and it has made huge strides in tablets this year.”

Smartphones based on Android, which Google provides to hardware manufacturers for free, made up 78 percent of the global industry in 2013, up from 66 percent in 2012, according to Gartner. Apple’s iPhone was second with 16 percent, down from 19 percent. Apple’s share of the global tablet market dropped to 36 percent in 2013 from 53 percent the year earlier, while Samsung jumped to 19 percent in 2013 from 7 percent, according to Gartner.

Apple products are popular in Vietnam, where a brand-savvy young population covets the instant recognition a slender iPhone brings, said Lam Nguyen, Ho Chi Minh City-based country director at International Data Corp. He predicts Vietnam smartphone sales will increase 56 percent to about 12 million units in 2014, and Apple will get a good chunk of that.

“There are more and cheaper alternatives out there,” Nguyen said in a phone interview. “This is about a relatively affordable status symbol. It’s fashion.”

Sales of iPhones in Vietnam soared 262 percent in Apple’s fiscal first half ended March 29, Chief Executive Officer Tim Cook said during a conference call with analysts in late April.

Michaela Wilkinson, a spokeswoman at Apple’s headquarters in Cupertino, California, declined to comment about the company’s Vietnam and Southeast Asia retail strategy.

FPT’s F.Studio stores, styled after Apple outlets in developed markets, feature minimalist interiors and English-speaking store clerks clad in black and trained by the iPhone-maker.

Apple’s retail priorities were elsewhere, Ngoc said. “Then they started to focus on Vietnam,” he said. “It’s a big change for Apple. Southeast Asia is a big market.”

As part of its increased focus on Southeast Asia, Apple also has retailing relationships similar to the one with FPT with local chains in countries including Malaysia and Thailand.

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