Vietnamese status seekers pay up for iPhone 4

HANOI, Vietnam--"Whoa! That just looks so pretty on you!" That's part of a conversation I overheard between two trendy twentysomething women in an air-conditioned cafe on a hot summer day here.

Their chat caught my attention, among other reasons, because the accessory in question wasn't a sparkling engagement ring or the super short shorts they were both wearing but Apple's latest smartphone, the iPhone 4.

I've heard a lot of people in Hanoi, by the way, call the newly released Apple smartphone the "iPhone 4G" (or 4G for short). This misperception about the product's name, however, is much easier to understand than the incredibly high price the phone is selling for here.

Since the first generation of the device, the iPhone has been a much sought-after gadget in Vietnam. In the beginning, the phone wasn't officially available in the country (local providers, including Viettel and VinaPhone, started carrying the iPhone 3GS just about three months ago) and most were smuggled in from the States and had to be unlocked before they could be used, courtesy of Apple's tight controls and exclusive deal with AT&T.

The iPhone used to be not just hard to find but also hard to use in Vietnam, compared with other smartphones. That's because if a user accidentally upgrades the phone's operating system (some people upgrade the phone's firmware without knowing what they are doing), it will be locked again and become useless until a new unlock method is available.

Despite that nuisance, when the iPhone 3G first came out, the locked U.S. version cost about twice its original price in Vietnam. The phone was so popular that unlocking it became a lucrative business in both Hanoi and Ho Chi Minh city.

The iPhone 4, though, will likely be available soon via proper channels, and there are apparently many who are willing to pay up to $2,500 to be the first in the country to have one.

I checked out the iShop in Hanoi, one of a few electronic stores in Vietnam that sell Apple products and have the new iPhone on sale. Here, the 32GB version is currently priced at $1,850, the 16GB is cheaper at $1,600. These phones are international versions smuggled in from France and are "factory unlocked," meaning no unlocking is necessary before they can work with Vietnamese GSM service providers.

There are also locked U.S. versions of the phones--which currently can't be used with Vietnamese carriers until a method to get them unlocked is available--that cost around $1,000. During the 15 minutes I was in the iShop, a few other people came in to check out the phone, marveling at its gorgeous Retina display and then leaving after learning about the outrageous prices.

A couple of days ago, however, things were a little different. According to the shop's manager, both versions of the phone were priced slightly higher and there weren't enough to sell. Now, more than 10 days since the phone was first released, most new customers want to wait until they are officially available in Vietnam to buy them at lower prices.

Nonetheless, I have run into a few people who have the iPhone 4 and I couldn't help but wonder why they were willing to pay so much for a device when some of its popular features, such as turn-by-turn GPS navigation, are not yet fully supported in Vietnam. Considering most people in Vietnamese cities earn around $200 a month, there must be a really compelling reason why some are willing to drop such a huge amount for a phone.

As it turns out from the conversation mentioned earlier, it's far more than just a smartphone to them.

Thu Anh, one of the young women in the cafe, told me she actually bought the phone in Ho Chi Minh City a few days earlier and paid some $2,500 for it. "I've been waiting too long for this! Look, it's so pretty, it's worth it," she said, showing me the screen. After talking to her for a few more minutes, however, I found out that the "it's so pretty" notion isn't the only reason the phone was "worth it" to her.

Bragging rights
Thu seemed to really enjoy the fact she was one of a few in Vietnam who currently own the phone and, especially, that she was willing to pay a crazy price for it. I didn't ask her where she got the money, but I'm assuming she isn't among those with a $200 monthly salary.

In Vietnam, there's a sense of social recognition afforded to those who are willing to pay a lot for luxurious items and many people view such accoutrements as a sign of success. When it comes to gadgets, the iPhone 4 has become the trophy for those who want to show their ability to stay on top of technology, regardless of whether they can actually take advantage of it.

While it doesn't seem to make much sense, if the iPhone 4 were cheaper and more readily available (great news for general tech enthusiasts), people like Thu would probably be less interested in it. "It's a good feeling to have something that others can't afford yet," Thu said with a smile. This is somewhat of a reverse mentality to the ever-popular phenomenon of if I can't afford it, I'll buy the knockoff.

In their defense, however, at least the iPhone 4 is much more useful than other jewelry, such as pendants or necklaces, which can't make a call or hook up to iTunes.

Who knows? If social currents keep going this way in Vietnam, a trendy gadget could one day replace a ring during a marriage proposal, in which case, please note, ladies: a large (60-inch or more) HD plasma TV would probably warrant a yes from me.

Read Dong Ngo's past dispatches from Vietnam here.