Apple tested production of AirPods in Vietnam, reducing dependence on China

According to sources from the Nikkei Asian Review, Apple is preparing to test its wireless AirPods in Vietnam in an effort to speed up its plan to diversify its production lines outside China. .

According to two sources close to the matter, China’s GoerTek, one of Apple’s key assemblers, will begin testing the production process of AirPods wireless headphones to a sound factory. they are in northern Vietnam this summer.

This will mark the first time these wireless headsets are manufactured in a market other than China. Launched in 2016, AirPods has become Apple’s fastest-growing product, with 20 million units shipped in 2017 and 35 million in 2018.

According to a person who knows directly about the incident, Apple also requires two other component suppliers to support Goertek’s efforts, even though the initial production volume is still very small. ” Suppliers are required to keep prices constant for this trial production phase, but prices can be re-evaluated when production volumes increase .”

Apple has long put the production of its EarPods wired headphones in Vietnam. However, to date, wireless headphones AirPods are only manufactured in China by Inventec, Luxshare-ICT and GoerTek suppliers.

Realizing that China’s advantages in cost and cheap labor are fading, Apple has pushed its suppliers to diversify production locations. Meanwhile, AirPods is currently the world’s best-selling wireless headset with 60% of the global market, far behind its rivals like Samsung, Huawei and other traditional audio manufacturers.

According to Counterpoint, global shipments of wireless headsets will increase from 48 million in 2017 to 129 million products in 2020.

This strong growth momentum is giving Apple the opportunity to accelerate the process of diversifying production locations outside China without having to reduce output – something that could become a sensitive issue for Apple and its suppliers.

According to analyst, Chiu Shih-Fang of Taiwan Economic Research Institute, Apple will ” approve” China + One “strategy ,” when ” to ship semi-finished products to new locations and then Assembling them together, they won’t produce everything from start to finish “in one place.

At this time, Vietnam is emerging as a viable alternative, thanks to its proximity to China in order to take advantage of logistic advantages as well as a skilled workforce, but at a cost. lower.

” Many technology companies are shifting or increasing production [in Vietnam] to avoid tariffs, because they are close to China and have a relatively complete supply chain compared to other Southeast Asian countries . ” Karen Ma, an emerging market analyst at Hsinchu-based Industrial Technology Research Institute, said. ” However, many people are also concerned that Vietnam may become too hot, and will soon fall into labor shortages and increase production costs .”

Refer to Nikkei Asian Review