Apple Inc. (NASDAQ:AAPL) recently started extending its marketing efforts into Vietnam, a country still nominally communist but a far cry from the violent dictatorship of Ho Chi Minh a few decades ago with its mass executions and frantic xenophobia. The rival of the Cupertino electronics giant, South Korean firm Samsung, is likewise active in Vietnam, aiming both to market its products there and to exploit low labor costs at large new Samsung factories.
Samsung has opened two facilities thus far in “Nam,” including an earlier $1 billion factory in Ho Chi Minh City, formerly known as Saigon. The second facility, in the country’s capitol of Hanoi, is an Enterprise Experience Center which demonstrates the business usefulness of many different high tech items, ranging from LED lighting to air conditioning to mobile communications devices such as smartphones.
Samsung’s Enterprise Experience Center also offers training courses to Vietnamese entrepreneurs and government officials, enabling them to learn how to integrate advanced technology into their relatively backward country. Of course, this also serves the purpose of advertising the Korean firm’s products, which is Samsung’s main purpose for setting up the center. Four additional centers are planned, spread between three cities, including Hanoi, Ho Chi Minh City, and Danang, as Samsung works to compete with its arch-rival Apple (AAPL) for Vietnamese cash.
Samsung’s under-construction facilities were the scene of labor riots a few months ago, a rare event for Vietnam, where the government still keeps the individual firmly in his or her place. The police restored order in just three hours, however, and construction proceeded, as Samsung pursues cheap labor in much the same way that Apple (AAPL) outsources to Korea for the same reason. The factory will be used to assemble smartphone components fabricated elsewhere.
Apple Inc. (AAPL) is working to tap into the approximately 15 million strong market of Vietnamese who live in urban areas in order to build up its Asian sales base. The fact that iPhones have already penetrated the market is highlighted by Flappy Bird, one of the App Store’s most successful games ever, and whose origins lie in Vietnam.
As both Apple and Samsung continue to sell smartphones and other electronics in Vietnam, both are also helping to boost and modernize economic activity in the nation, thus producing feedback that will raise their sales, and so forth. Despite their rivalry, each firm is apt to benefit from the unique strengths its competitor brings to a rising market.
