In addition to producing AirPods and iPads in Vietnam, Apple plans to manufacture Apple Watch and MacBooks in the country as well. Nikkei Asia reports that the Cupertino tech giant is in talks with suppliers to produce its smartwatches and notebooks in the Southeast Asian country as part of its effort to diversify the supply chain outside China.
In 2020, the Cupertino tech giant expanded to Vietnam to produce AirPods after a trade war broke out between Beijing and Washington under former U.S. President Donald Trump’s administration which led to the imposition of higher tariffs on imports from China. And the country’s zero COVID policy and power cuts have also hampered production drastically.
In May 2022, Prime Minister of Vietnam Pham Minh Chinh met with CEO Tim Cook during his U.S. visit to discuss the proliferation of the company’s business in Vietnam. PM Chinh assured Cook that his government was willing to create a “fair, transparent and market-based business environment and investors gain ground in Vietnam.”
Apple suppliers to build test production lines for Apple Watch, MacBook, and HomePod in Vietnam as it continues to expand outside China
Vietnam is already considered the “most important” production hub for the tech company outside of China, manufacturing a range of flagship products. Now, Apple suppliers Foxconn and Luxshare Precision Industry have begun test production of the Apple Watch in northern Vietnam.
The Apple Watch is even more sophisticated, according to industry experts, who say that squeezing so many components into such a small case requires a high degree of technological skill. Producing the device would be a win for Vietnam as the country attempts to further upgrade its tech manufacturing sector.
Furthermore, the tech giant is in talks with suppliers to build test production lines for its MacBook and HomePod mini. However, the mass production of MacBooks in Vietnam is impacted by COVID-19-related disruptions and the notebook’s larger supply chain network which is centered in China and very cost-competitive.
The establishment of Apple Watch and MacBook production units is a huge win for Vietnam and indicates that the tech giant has big plans in the country. But it must be kept in mind that, Apple’s diversification outside China does not mean that it wants to exit the county completely because it is one of the biggest markets for Apple products. The iPhone sales in China from April till June propelled iPhone sales to $40.7 billion in Q3, 2022.
Therefore, the tech giant’s mitigating the geopolitical impacts by adding more Chinese suppliers and building production outside the country as part of its diversification strategy.