Airpods To Be Made In Vietnam To Reduce Dependence On China

Apple is reportedly planning to begin making some of its AirPods in Vietnam, as part of the company’s wider-scale moves to reduce dependence on China.

The report says the initial plan is for a small-scale trial, but the company is already discussing volume production with suppliers…

The Nikkei Asian Review cites two unnamed sources for the story.

Apple currently has three AirPods suppliers — GoerTek, Iventec, and Luxshare-ICT — but this would be the first time the product has ever been made outside China.

China’s GoerTek, one of Apple’s key contract manufacturers, will this summer begin testing the resilience of its manufacturing processes for the newest generation of AirPods at its audio factory in northern Vietnam, two sources with knowledge of the plan said.

Although this is just a test to ensure that the plan will work, Apple is looking ahead to mass production.

Plans to boost manufacturing and assembly of Apple products outside China have been given new impetus by the trade war initiated with China by the Trump administration. Although there have recently been more conciliatory noises, the threat of 25% tariffs on all Apple products remains real.

“The initial output will be limited, but it is easy to increase capacity once all the manufacturing procedures are running smoothly,” the person said.

However, for a company that likes to reduce risk as much as possible, it also makes longer-term sense to have manufacturing facilities in multiple countries in order to reduce dependence on China. Additionally, production costs in China have been steadily increasing, given the country’s current dominance in contract manufacturing, and a rising standard of living in the country driving up labor costs.

One recent report even suggested Apple might be seeking to move as much as 15-30% of its production out of the country within three years, with Foxconn suggesting that all iPhones created for sale in the US could be made outside China. That scale of shift within such a short period of time seems unlikely for reasons discussed here, but it’s certainly both credible and to be expected that Apple would continue gradual moves in this direction.

There are rumors that Apple is working on a third-generation model, to be launched late this year, with active noise cancellation the primary new feature.

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