Why is Vingroup jumping into the competitive smartphone sector?
VietNamNet Bridge - The decision of Vingroup to jump into the smartphone market, which is entering its most difficult period, has surprised many people. Technology experts believe that making smartphones is not Vingroup’s long-term goal.


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Vingroup decided to jump into the smartphone market



Over the last decade, Apple and Samsung have taken most of the profits. Other brands, including well-known ones such as Huawei, Xiaomi and BKK (the owner of Oppo, Vivo and OnePlus), have made modest profit.

Meanwhile, more signs of uncertainties have appeared: sales slowed and the average selling price increased.

Analysts believe that making smartphones is the first step by Vingroup in its plan to enter the technology world.

Why smartphones?

After 10 years of development, smartphones are still the focus of the technology world. Smartphones reflect the convergence of nearly all advanced technologies. In terms of hardware, smartphones have CPU/GPU, RAM, camera, network chip, touchscreen, and even specific chips for AI. In terms of software, even AI and AR are on mobile phones.

After 10 years of development, smartphones are still the focus of the technology world. Smartphones reflect the convergence of nearly all advanced technologies. In terms of hardware, smartphones have CPU/GPU, RAM, camera, network chip, touchscreen, and even specific chips for AI. In terms of software, even AI and AR are on mobile phones.

Though sales growth has slowed, at least 1 billion smartphone products are still sold every year. 

The market for tablets has narrowed, while game and music players are now not that popular. But everyone wants a smartphone. 

When Vingroup expands

Vingroup has not concealed its ambitions to join the technology world. When setting up Vsmart, capitalized at VND3 trillion ($130 million) in June 2018, the group stated that it will step by step approach AI (artificial intelligence), automation and material technology.

And Vingroup’s ambitions could be even bigger. In principle, if a company can make smartphones, it will have advantages to make other smart devices. For instance, if it builds a supply chain for VSmart, Vingroup will be able to take full advantage of relations to build a supply chain for tablets, laptops or smart speakers.

With smartphones, VSmart will be able to adapt to any changes in the market. For example, if succeeding with Vietnamese-speaking chatbot on VSmart products, VSmart will be able to join the smarthome market at any time. 

Vsmart and the leading Spanish technology firm BQ in early July signed a strategic partnership agreement to promote the production of smartphones branded Vsmart in accordance with international standards.

Under the agreement, BQ will sell intellectual property rights to Vinsmart to develop two Vsmart brand name smartphone products for the high- and mid-end markets.


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Kim Chi

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