How Price Segmentation Is Driving Smartphone Competition in Vietnam

Smartphone Price Segmentation Is Redefining Competitive Positioning in Vietnam

The smartphone industry in Vietnam is being shaped by the ability to segment prices effectively, as opposed to the number of models being introduced. Although the number of shipments is holding steady, the revenue is being driven by the capacity of the brand to match the pricing of the product with the purchasing power of the Vietnamese consumers. This is pushing the smartphone industry players to focus on tier segmentation.

Budget Segment Remains Volume-Driven but Margin-Constrained

The sub-USD 200 market remains an entry point for young and rural consumers. However, the pace of expansion in this market has decelerated compared to previous years. Brands in this market are finding it difficult to sustain their volumes while absorbing the increasing costs of components and logistics.

Manufacturers are standardizing hardware, using old chipsets, and keeping camera designs simple to keep costs down. Battery capacity and display quality are usually prioritized because these aspects have high perceived value without proportionally increasing manufacturing costs. In Vietnam, majority of the budget smartphones sold in 2025 boasted batteries over 5,000 mAh, indicating how firms are aligning their offerings with consumer expectations rather than innovation metrics. 

From a business perspective, most brands in this market consider it a customer acquisition strategy. The aim is to acquire first-time or price-conscious consumers into their brand ecosystem, hoping to migrate them to higher tiers in the future. This long-term perspective also helps explain why some firms continue to invest in after-sales services and software updates for low-priced offerings.

Mid-Range Devices Are Becoming the Core Profit Engine

The mid-range segment has turned out to be the most significant pricing band in Vietnam from a strategic standpoint. Consumers in this segment are ready to pay for noticeable upgrades in performance, display, and camera durability. This trend is completely changing the way companies are distributing their features across different segments.

Companies are now increasingly lining up their mid-range devices as flagship experiences. Features such as AMOLED displays, high refresh rates, fast charging, and good camera sensors are no longer considered differentiators, as they have become the norm. Many companies are allocating a significant part of their R&D investments in Vietnam to optimize their mid-range offerings, especially in the areas of thermal and battery performance.

Pricing strategy is important in this segment. A difference of USD 20 can make a big difference in purchase decisions, especially in the online space where consumers are making direct comparisons. To address this, companies are now experimenting with storage-tier pricing, regional variants, and channel-exclusive variants.

Premium Pricing Faces More Selective Demand

The market for premium smartphones, which cost more than USD 600, is a smaller but highly significant segment in Vietnam. In this market, the demand is primarily driven by professionals, entrepreneurs, and tech-savvy consumers in urban areas.

In the premium segment, vendors are no longer using the hardware alone as a reason to charge a premium price. Instead, they are offering an ecosystem of benefits that include extended warranties, priority service programs, and integration across devices.

Furthermore, it is interesting to note that the premium pricing strategies in Vietnam have become more conservative. Brands are now spacing out their flagship launches and are not allowing the prices to drop too quickly, which could result in a degradation of brand value.

Explore pricing strategies and competitive positioning in the Vietnam Smartphone Market Report.

Financing and Installment Models Are Shaping Price Perception

Price segmentation in Vietnam cannot be discussed without taking into account the financing aspect. The installment payment method has become mainstream, especially for mid-to-high-end smartphones. Telecommunications companies, physical stores, and online financing platforms are key players in this space.

Retail chain data shows that nearly half of the smartphones above USD 300 in Vietnam are bought using the installment payment method. This has enabled smartphone manufacturers to market higher-priced phones as more accessible without reducing list prices. For smartphone companies, this means less emphasis on discounts while still increasing addressable demand.