In yet another sign that it’s moving to diversify product manufacturing beyond China, Apple’s reportedly been trialing AirPods production in Vietnam, per a communication seen by Nikkei.
Japanese outlet Nikkei Asian Review has the story:
China’s Goertek, one of Apple’s key contract manufacturers, this summer will begin testing the resilience of its manufacturing processes for the newest generation of AirPods at the company’s audio factory in northern Vietnam, two sources with knowledge of the plan said. […] Apple has written to components suppliers, asking them to support Goertek’s efforts despite initially very small volumes.
AirPods are currently being mass-produced by Inventec in China.
Introduced in 2016, the wireless buds racked up an estimated 35 million shipments in 2018 vs. 20 million in 2017, claiming 60 percent of the wireless earphone market. EarPods, Apple’s wired headphones that came bundled with your iPhone or iPod, are being produced in Vietnam, too.
But why Vietnam?
Vietnam has emerged as a powerful alternative, thanks to the geographical proximity to China that benefits logistics, and to its lower cost, but highly skilled labor. However, with just 95 million people — roughly one-fifteenth the Chinese population — Vietnam’s workforce is limited, and there are already signs of potential labor shortages and rising wage costs as many companies move there to escape the fallout from the US-China trade tensions. President Donald Trump’s threat to impose tariffs on Vietnam ahead of last month’s Group of 20 summit has sparked concern among those looking to diversify to the Southeast Asian country.
Nikkei also said earlier that Apple could move as much as 30 percent of its total device production out of China due to the ongoing trade ware between the United States and China and the dreaded tariffs threatening to jack up prices of Apple’s China-made products.
That report claims Apple has an internal team looking at options and has already reached out to companies like Foxconn, Wistron and Pegatron to evaluate the available options.