The iPhone Paradox in Vietnam

iPhones are sold in large quantities, with high revenue but thin profit margins. Dealers still have to compete for market share to gain other benefits.

Apple is among the top 3 mobile phone manufacturers in Vietnam in terms of sales volume. They lead in terms of revenue brought to dealers, far surpassing their competitors. However, this does not mean huge profits.

High-value products create pressure on inventory and debt for many retail systems. The high level of competition and price wars make the profit per iPhone lower than that of Android phones. In some periods, Apple phone dealers have almost no profit.

In return, this item is the center of the Apple ecosystem. Customers tend to buy additional accessories, headphones, watches or extended warranties. This becomes an important source of revenue for retailers with good profits.

Sell ​​more, profit less

According to a report by a reputable market research company, Apple sold about 5,000 billion VND worth of iPhones in Vietnam during a low month of the market. This company alone accounts for about 50% of the current industry revenue. These numbers reflect the huge proportion that Apple holds.

The iPhone has also become an important item for retailers in Vietnam. The product is almost always in the most visible position when entering large mobile phone stores. On the websites of The Gioi Di Dong andFPT Shop, Apple products are often present on the home page, in a prominent position.

A report by market research firm Metric also shows that Apple is the brand that brings in the most revenue for e-commerce platforms in Vietnam such as Shopee, Lazada, and TikTok Shop. Of these, iPhone accounts for the overwhelming majority.

Scene of users lining up to buy new iPhones in Vietnam on the opening night. Photo: Phuong Lam.

Speaking with Tri Thuc - Znews , representatives of genuine retail systems such as FPT Shop, CellphoneS, 24h Store confirmed that iPhone accounts for a large proportion of revenue at these units, fluctuating between 40-60% depending on the time.

However, Apple phones do not bring much profit. “Although iPhone sales are high, the direct profit margin on the device is not too high due to price competition,” said Ms. Anh Hong, representative of the 24h Store chain.

According to Tri Thuc - Znews 's source, dealers can earn about 8% profit on each iPhone during favorable business periods, mainly during the first launch period when the product is sought after. However, this is not a high number in the industry as a whole, much lower than Android models.

Before Apple opened its online store, iPhones had no listed price, and dealers could "price them high" when they were in short supply to make a profit. This situation was more common with the "hot" models and colors at the launch, usually the lowest capacity version of the Pro Max model.

However, currently, the number listed by Apple on its website has become the common ceiling that domestic dealers can order. This somewhat controls profits.

On the other hand, when the market is at its low point, purchasing power is low, and all parties compete to reduce prices to stimulate demand, profits are decreasing. "There was a time when selling iPhones did not make any profit," said a manager at a leading mobile phone retailer in Vietnam.

No profit, still have to sell iPhone

Although not bringing in a large profit, domestic retailers still invest heavily in Apple phones. The famous product, high recognition and average value of over 20 million VND helps to beautify the books, increasing revenue in reports.

In fact, the large revenue from iPhones has become a negotiating advantage for some dealers when dealing with other phone companies.

Genuine accessories for iPhone are expensive, with cases costing 1-1.5 million VND each. Photo: Hai Duong.

On the other hand, Apple phones also help dealers make money by selling accompanying accessories and warranty packages.

“In addition to direct revenue from the iPhone, this product also plays a central role in the Apple ecosystem. Many customers, after purchasing the phone, will continue to invest in iPad, MacBook, Apple Watch or AirPods to synchronize the experience. This is a big advantage compared to Android, helping to increase revenue and profit margin thanks to the diversity of accompanying products, while retaining customers in the ecosystem for a long time,” said Mr. Nguyen Lac Huy, representative of the CellphoneS system.

In addition, warranty packages also bring in big profits for dealers. This service is often sold separately by dealers, the price ranges from 6-10% of the phone's value. iPhones are expensive, users tend to want to protect their assets more, willing to pay for peace of mind. For each device, dealers can earn 1-2 million VND for the warranty package.

However, this service works in parallel with Apple's after-sales service. If a product is defective and is accepted by Apple, the store is not responsible for the device. If the customer does not encounter any special problems during the lifetime of the customer, the entire figure is converted into profit.

Thus, a store can earn an additional 2-3 million VND per customer buying a new iPhone thanks to selling accessories and accompanying warranties.

Source: https://znews.vn/nghich-ly-iphone-o-viet-nam-post1582825.html