Apple will start the trial production of the AirPods in Vietnam in a bid to diversify its production and move it out of China.
Apple’s supply-chain partner GoerTek will start testing the manufacturing of AirPods in its factory in North Vietnam from this summer.
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.
Initially, only small volumes of AirPods are expected to be produced in Vietnam, though Apple has asked all its component suppliers to support GoerTek in this effort. It has asked them to keep the component pricing intact at least during the trial production run. As per one of the sources, the component prices will be reviewed once the production volume increases.
Apple suppliers have so far only manufactured the AirPods in China, with only the wired EarPods being manufactured in Vietnam.
Apple has been forced to diversify its supply-chain and expand it out of China due to the ongoing trade tensions between the U.S. and China. The rising labor costs in China are also a key reason behind this decision.
The Cupertino company is looking to move at least 15 percent to 30 percent of its device output outside of China.
Apple dominates the wireless earphones market with a market share of over 70 percent. There are a number of reasons behind this including the fact that the AirPods were the first truly wireless earphones to launch in the market and the seamless way in which they work with other Apple devices.
Apple launched the second-generation AirPods with its H1 chip earlier this year. It offered better battery life and always-on Hey Siri detection compared to the original AirPods. The company is expected to launch the third-generation AirPods later this year with a better surface coating for better grip, improved sound quality, and an all-new design.[Via Nikkei]