Apple tests AirPod production in Vietnam amid “China plus 1” strategy
This will mark the first production of the wireless earbuds outside China.
Apple plans to start trial production of its popular AirPods wireless earphones in Vietnam as it seeks to diversify manufacture beyond China, Nikkei Asian Review has reported.
Illustrative photo
|
This will mark the first production of the wireless earbuds outside China.
Apple has written to components suppliers to ask them to support Goertek's efforts despite initially very small volumes. Suppliers are requested to keep the pricing unchanged for the trial production stage, according to a communication seen by the Nikkei Asian Review.
"The initial output will be limited, but it is easy to increase capacity once all the manufacturing procedures are running smoothly," a source said.
Apple has long sourced its traditional EarPods in Vietnam. However, until now, AirPods have been made in China by suppliers Inventec, Luxshare-ICT, and GoerTek.
The earbuds came to market in 2016 and are Apple's fastest growing product, with 35 million units sold last year versus 20 million in 2017. The strong growth momentum gives Apple the chance to accelerate diversification of production outside of China without necessarily reducing volumes there.
"It’s very likely that Apple will adopt the “China plus one” strategy when it comes to diversification efforts," said Chiu Shih-fang, a supply chain analyst at Taiwan Institute of Economic Research. That meant the company would increase production in countries outside China without reducing Chinese volume significantly at the start.
China's low birthrate, rising labor costs, and the protracted trade tensions between Washington and Beijing have prompted Apple to review its reliance on Chinese factories.
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, 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 US-China trade tensions.
21:05, 2025/02/03
Bright prospects for FDI inflows into Vietnam in 2025
Market size, growth potential, low labor costs, and stable political and social conditions continue to be Vietnam’s selling points in attracting foreign investors.
10:57, 2025/01/30
Foreign companies confirm investment expansion in Vietnam in 2025
Some foreign firms are optimistic about Vietnam's economic prospects in 2025 and plan to expand investment, focusing on sustainability across sectors.
16:35, 2025/01/20
PM invites Skoda to manufacture electric vehicles in Vietnam
The Vietnamese government would offer incentives to investors who meet technology transfer requirements and increase the scientific and technological value of their investments.
16:33, 2025/01/08
US Berggruen Holdings to help Vietnam set up investment funds
Vietnam's growing political and global supply chain prominence solidifies its position as a dynamic nation.
21:21, 2024/12/30
Vietnam releases Esports White Book 2022-2023
The growth of Vietnam's esports market is highlighted in the Vietnam Esports White Book 2022-2023, which outlines global trends.
14:43, 2024/11/18
Aircraft manufacturer Embraer seeks comprehensive aviation partnership with Vietnam
The Vietnamese leader urges the aircraft manufacturer to collaborate on technology transfer, airport construction and operation, research, and investment in Vietnam.
- Better links with FDI firms to support Hanoi businesses
- Vietnam calls for more US investment in innovation, hi-tech
- Vietnamese leader urges Boeing to build production facility in Vietnam
- Foreign capital pouring into Vietnam's real estate market
- Vietnam news in brief - August 24
- Growing number of FDI firms moving to Vietnam