Guys, the news just got out delivering another hit, what with Apple moving production out of China. Just in, Apple sets up trial-run for manufacturing its Airpods in Vietnam. Have we heard the last on cheap manufacturing and sourcing, yet?
Well, as per a new report by Nikkei Asian Review, the obvious becomes more than a match for everyone’s eyes! Apple moves AirPods making to Vietnam, thus reducing its cost of production, in effect. We have already heard that Apple seeks to move 15-30% of its manufacturing out of China.
Eyeing Other Destinations Apple to Reduce AirPods Production Costs
Delivering unparalleled hearing experience – Apple AirPods costs in three digits. Obvious then, their production cost would be stiff. It also indicates a possible higher tariffs in China. That makes sense for Apple to source this particular product from cheaper manufacturing destination like Vietnam or any other place out of it.
Chiu Shih-fang, a supply chain analyst at Taiwan Institute of Economic Research, was quoted in the news saying, “It’s very likely that Apple will adopt the ‘China plus one’ strategy when it comes to diversification efforts.”
Apple has sought alternate destinations as manufacturing hubs for its products – smartphones and accessories. India is also becoming another potential manufacturing hub for the world’s largest smartphone maker. Its major vendors – Foxconn, Wistron and their ilk, have already set shop there!
Other Manufacturing Hubs May Prove a Mixed Bag for Reducing Costs of Apple Products
We feel such moves will push those potential manufacturing hub ‘countries’ who can offer incentives and facilities for lowering production costs for global manufacturers like Apple, Samsung, etc.
However, fears expressed indicate that destinations like Vietnam, and India among others (due ‘industry overheat’ due to rising labor shortage, infrastructure costs, etc.), will all possibly render them to drop the ‘cheap destination’ tag for manufacturing.
Chinese companies will be hit-hard by Apple and other US companies due to looming trade wars. Interestingly, Apple phones purchases have registered steep fall while local brand Huawei is zooming in Chinese smartphone markets. Can we call that show of rising patriotism?
Thus, in all that we can now foresee is a mixed bag for any global manufacturer like Apple to seek other destinations apart from the giant – China. Shout out if you know better on this scenario, as the ‘trade war’ fires are still raging….