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New Year Special Features '99

  • [Industry Forecast ’99] Vietnam Expects Sales of 300,000 PCs in 1999
  • January 8, 1999 (HO CHI MINH CITY, Vietnam) — The Vietnamese PC market will reach a volume of 300,000 units in 1999, according to a forecast issued recently by the Vietnam Computer Association.
    Mai Anh, general secretary of the VCA, said the estimated volume of PC sales in Vietnam at the end of this year is 250,000 units, versus 190,000 last year.

    “This market is very low,” Mai Anh said, “but I don’t feel pessimistic about its development.” According to Anh, IT expenditures in Vietnam remain too small to consider it a lucrative marketplace. Of the total expenditures, 82 percent were for hardware.

    “This figure in 1996 was US$2.35 per capita, and in 1997 it was US$3.35, just 1.1 percent of GDP per capita. In 1998 it is estimated at US$4,” Anh said. Anh said that even though the increase is inconsiderable, it still shows a tendency toward growth in the PC business that can help urge investors to put more money into the industry.

    “This growth rate ranks Vietnam’s PC market 13th among the countries in the Asia Pacific region, and accounted for 0.2 percent of the world PC market,” Anh said.

    According to Anh, between 1980 and 1982, the first microcomputers were assembled in Vietnam. However, for various reasons, the industry was unable to develop adequately.

    “Since 1990, PCs started to gain popularity in the country,” Anh said. “Sales increased and a few companies began to assemble PCs for business.”

    Currently, half of the PCs in the local market are locally assembled and sold at amazing cheap prices, often under US$500. Nguyen Trong, vice chairman of the Vietnam Computer Association, said most assembled PCs are made by hand, using only screwdrivers and components. They are not tested and there are no parts made in Vietnam.

    “Because no enterprise in Vietnam can produce any computer parts, they have to import all components to make PCs here,” Trong said. “We call this kind of PC a ‘no name’ PC, but they are very helpful to low-income users.”

    The Vietnamese government is enthusiastically supporting investment in the PC industry from foreign investors. “Vietnam is calling for foreign investment to set up a high-tech park in Hatay, 15 kilometers west of the capital of Hanoi, and another in Ho Chi Minh City,” Trong said.

    While very few giant corporations are putting money into manufacturing PCs in Vietnam, such as Daewoo Corp. of Korea, Fujitsu Ltd. of Japan or Hewlett-Packard Co. of the United States, the list of well-known foreign providers of components and PC parts for local PC assembly is long. It includes 3Com Corp., 3M Corp., Acer Corp., Compaq Computer Corp., Creative Technologies Inc., Genius Inc., Hayes Corp., Intel Corp., Maxell Corp., Quantum Corp., Samsung Co., Ltd., Seagate Corp. and US Robotics Inc.

    Phan Van Dinh, chief of the Vietnam Custom Bureau, said 1997 saw 900 servers and 42.231 PCs imported into Vietnam. He said, “This figure will increase 5-7 percent this year according to the figures we are collecting from imports of computer companies now,” Dinh said. Analysts said Vietnam’s PC and hardware imports are very inconvenient, because the numbers of local importers are too numerous. There is a crowd of 200 importers, he said.

    He added that in 1997, Vietnam sent US$65 million dollars to import PCs, and in 1998 it is estimated the PCs and hardware imports were up to US$100 million, at a maximum.

    Nguyen Xuan Chuan, Vice Minister of Industry, recently told BizTech that almost all computer giants in the world are present in Vietnam, but it seems they have no commitment to investing a lot in the country to manufacture PCs as a long-term strategy.

    “They want to sell PCs or components only, while what we need most here is to set up a network of PCs for the long term,” he said. In September, Vietnam’s state-owned conglomerate, Vietnam Electronics and Informatics Corp. (VEIC) decided to set up a PC manufacturing corporation consisting of eight companies with an ambition to produce Vietnam-branded PCs.

    “I am sure there will be no PCs from this VEIC corporation in the forecast of 300,000 PCs for 1999, because it cannot afford the capital of US$2 billion to really produce Vietnam-branded PCs,” Mai Anh of VCA said.

    Click here for more New Year features.

    (David Tran)

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