Apple is among the top three mobile phone manufacturers in Vietnam in terms of sales volume. They lead in revenue generated for dealers, far surpassing their competitors. However, this does not necessarily translate into huge profits.
High-value products create inventory pressure and accounts receivable burdens for many retail systems. Intense competition and price wars have resulted in lower profit margins per iPhone compared to Android phones. At certain periods, Apple phone dealers have been operating at near-profit.
In return, this item is central to the Apple ecosystem. Customers tend to buy additional accessories, headphones, watches, or extended warranty packages. This becomes a crucial revenue stream for retailers, offering good profit margins.
Sell a lot, make little profit.
According to a report by a reputable market research firm, Apple sold approximately 5 trillion VND worth of iPhones in Vietnam during a low-demand month for the market. This alone accounts for about 50% of the industry's current revenue. These figures reflect the very large market share that Apple holds.
iPhones have also become a crucial item for retailers in Vietnam. The product is almost always placed in the most visible location when entering large mobile phone stores. On the websites of The Gioi Dien Thoai andFPT Shop, Apple products are frequently featured on the homepage in prominent positions.
A report by market research firm Metric also shows that Apple is the brand generating the most revenue for e-commerce platforms in Vietnam such as Shopee, Lazada, and TikTok Shop. Of these, iPhones account for the overwhelming contribution.
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A scene of consumers lining up to buy the new iPhone in Vietnam on the night of its launch. Photo: Phuong Lam. |
Speaking with Tri Thức - Znews , representatives from authorized retail systems such as FPT Shop, CellphoneS, and 24h Store confirmed that iPhones account for a large proportion of revenue at these units, ranging from 40-60% depending on the time.
However, Apple phones don't generate much profit. "Although iPhones have high sales, the direct profit margin per device isn't very high due to price competition," said Ms. Anh Hong, a representative of the 24h Store chain.
According to sources from Tri Thức - Znews , retailers can achieve a profit margin of around 8% on each iPhone during favorable business periods, mainly during the initial launch phase when the product is in high demand. However, this is not a high figure compared to the entire industry, and is significantly lower than many Android models.
Before Apple opened its online store, iPhones didn't have fixed prices, allowing retailers to inflate prices during periods of scarcity to maximize profits. This was especially common with popular models and colors at launch, often the lowest-capacity versions of the Pro Max.
However, currently, the price listed by Apple on the company's website has become the general ceiling that domestic dealers can set. This somewhat restricts profit margins.
On the other hand, when the market enters a low-demand period, purchasing power is weak, and businesses compete by lowering prices to stimulate demand, profit margins decrease. "There were times when selling iPhones didn't yield any profit," shared a manager at a leading mobile phone retailer in Vietnam.
No words, but I still have to sell iPhones.
Despite not generating significant profit margins, domestic retailers still invest heavily in Apple phones. The product's popularity, high brand recognition, and average price exceeding 20 million VND help boost sales figures and increase revenue in their reports.
In fact, the high revenue generated from iPhones has become a negotiating advantage for some dealers when dealing with other phone manufacturers.
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Genuine iPhone accessories are expensive, with phone cases costing up to 1-1.5 million VND each. Photo: Hai Duong. |
On the other hand, Apple phones also help retailers profit from selling accompanying accessories and warranty packages.
“Besides direct revenue from iPhones, this product also plays a central role in the Apple ecosystem. Many customers, after purchasing the phone, will continue to invest in additional iPads, MacBooks, Apple Watches, or AirPods to synchronize their experience. This is a major advantage over Android, helping to increase revenue and profit margins thanks to the diversity of accompanying products, while also retaining customers long-term within the ecosystem,” said Mr. Nguyen Lac Huy, representative of the CellphoneS system.
Furthermore, warranty packages also generate significant profits for dealers. This service is usually sold separately by dealers, with prices ranging from 6-10% of the phone's value. iPhones are expensive, and 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 from the warranty package.
However, this service operates in parallel with Apple's after-sales service. If a product is faulty and Apple accepts it, the store is not responsible for the device. If the customer does not experience any significant problems throughout the product's lifespan, the entire amount mentioned above translates into profit.
Thus, a store can earn an additional 2-3 million VND per customer buying a new iPhone by selling accessories and providing accompanying warranty services.
Source: https://znews.vn/nghich-ly-iphone-o-viet-nam-post1582825.html
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