VietNamNet Bridge – Vietnam should not try to compete with other countries in the hardware development. It should gather strength to make its dream of developing the software industry realistic.
Part 1: Vietnam not a strong rival in hardware industry
The software industry now can make up 20 percent of the total turnover of the information technology, while the other 80 percent has been brought by the hardware industry.
However, the turnover from hardware products has not been brought by Vietnamese companies, but by foreign invested enterprises, namely Samsung, Canon, Panasonic, Foxconn, Nokia or Intel. The White Book on the information technology showed that Vietnamese hardware firms only contribute 10 percent of the total turnover from hardware products.
The top five Vietnamese biggest hardware firms mentioned in the 2012 White Book include FPT, CMS, Tan Binh Electronics, the Vietnam Electronics and Informatics Corporation and Hanel. However, the products of the companies do not succeed in Vietnam.
Some years ago, high technology products bearing Vietnamese brands turned up in the market, including CMS computer of CMS Company, Vietcom of Huetronics, Wiscom of Khai Tri. Nowadays, Vietnamese hardware firms have been focusing on making mobike phones, both feature and smart ones, tablets and ultrabooks. However, they still have to struggle hard to exist in the market.
CMC, for example, is still busy making desktop computers. It has been trying to make laptops and ultrabooks, but the promised products have not been available on the market yet.
Viettel, one of the biggest mobile network operators, has been cherishing the dream of making mobile phones, 3G USBs and tablets with Vietnamese technologies. At first, the company sold the Vietnamese brand products made in China. Later, it has tried to make products itself. However, Viettel is still not a big name in the hardware industry yet.
FPT, the biggest technology group in Vietnam, also has not succeeded with the hard ware products. FPT’s tablets and mobile phones have been distributed mostly within its FPT Shop network.
FPT’s President Truong Gia Binh admitted that FPT focuses on making content and developing software products, while the hardware is made in China.
Nguyen Trong Duong, Director of the Information Technology Department under the Ministry of Information and Communication, thinks that Vietnamese hardware firms should target the niche markets, develop specific products to serve specific groups of customers.
He went on to say that if Vietnam competes with others to make products for the majority of customers, it would fail the competition, where the rivals all have strong capability and experiences.
However, it would be not easy to follow the way Duong has mentioned. In order to make individualized products and attack niche markets, Vietnamese enterprises have to make heavy investments in the research and development (RD), while this would be a very costly investment.
In fact, Vietnamese firms have marketed a lot of products bearing Vietnamese brands. However, the products have never been highly appreciated by consumers and experts. In the eyes of Vietnamese, the products are simply “Chinese goods under the Vietnamese mask” or “Chinese goods, Vietnamese labels.” Binh of FPT also said Vietnam will not be able to compete with China. Most of the products of Apple, Nokia or Samsung have also been made in China.