iPhone sales in Vietnam have been hit by the launch of the new iPhone 4 as local consumers have shifted their attention to the upcoming phone, local retailers say.

Tran Ngoc Dinh, director of iShop, an Apple authorized retailer in Hanoi, said his store had to cut prices by around VND500,000 per phone immediately after the iPhone 4 was unveiled in the US.

PhonGee, a store in Ho Chi Minh City, told local news website VnExpress that after the announcement its iPhone sales dropped 40 percent while many customers placed order for the new version of the popular phone.

Other phone sellers said few customers bought previous models of the iPhone over the past week as they wanted to wait for the iPhone 4 to arrive before making a decision.

But they also noted that an unlocked iPhone 4 would not cost less than VND20 million, which means sales of older and cheaper iPhones could recover later on.

The iPhone 4 was unveiled at Apple’s Worldwide Developers Conference in the US last week. The phone is expected to go on sale in several countries later this month at expected retail prices of US$199-299.

Only hours after the announcement, local wireless carrier Vinaphone said it would distribute the new iPhone in July. Vinaphone, together with military-run telecom Viettel, has sold previous versions of the iPhone since March, but sales have been sluggish.

The price of the cheapest iPhone 3GS in the US has been cut to as low as $97, and Vinaphone Deputy Sales Manager Pham Ngoc Tu said if discounted iPhones are brought into Vietnam in huge volumes, prices will fall on the local market. The company, however, has not decided to cut its prices.

Another large wireless provider, MobiFone, announced plans to sell the iPhone in April in Vietnam but has yet to do so. The company confirmed withThanh Nien that it remained intent on selling the phone but it could not say when it will actually be able to retail the product.

News website VnExpress cited a source last Saturday as saying that MobiFone had not even closed its deal with Apple. “Moreover, Apple doesn’t see Vietnam as a potential market, so it won’t really matter whether or not there is a third distributor.”