Google is transferring aggressively to shift manufacturing of its Pixel smartphone from China to Vietnam because it seeks to construct a low-value provide chain in Southeast Asia that can function a springboard for its rising hardware ambitions.
Working with an accomplice, Google began work this summer season to transform a former Nokia manufacturing facility within the northern Vietnamese province of Bac Ninh to deal with manufacturing of Pixel telephones, two individuals conversant in the corporate’s plans stated. This is an identical province the place Samsung developed its smartphone provide chain a decade in the past, so Google could have entry to an experienced workforce.
The push to develop a Vietnamese manufacturing base displays the dual pressures of upper Chinese labor prices and the spiraling tariffs ensuing from the commerce warfare between Washington and Beijing. The U.S. web large intends to finally transfer manufacturing of most of its American-sure hardware outdoors of China, together with Pixel phones and its good fashionable speaker, Google Home, in response to the sources.
The Vietnam manufacturing strains might be a key a part of Google’s drive for development within the smartphone market. Google goals to ship some eight million to 10 million smartphones this year, double from a year in the past, sources instructed the Nikkei Asian Review. Whereas Google’s Pixel smartphone model continues to be a minor participant within the business — not even rating within the global top 10, in keeping with tech analysis agency Counterpoint — it’s rising quickly.
The mid-priced Pixel, launched in April, helped Google develop into the fifth largest cellular model within the U.S. for the second quarter of 2019, grabbing market share regardless of a wider trade stoop.
Google’s aggressive hardware marketing campaign is predicted to heap strain on second-tier cellular makers reminiscent of LG Electronics and Sony, that are struggling because the business faces its third consecutive year of decline.
By diversifying its manufacturing into Vietnam, Google hopes to make sure sustainable manufacturing of the Pixel vary, a showcase for its Android working system. Put in in 80% of the world’s smartphones; Android is dealing with a problem from Chinese rival Huawei Technologies, the world’s second-largest handset maker, which in August unveiled its personal cell platform, Harmony OS.