In a surprising turn of events, Google is planning to shift its flagship smartphone Pixel’s production from China to Vietnam. This bold move came as Google made its way around the skyrocketing Chinese labour costs and the tariff wars on Chinese goods led by Trump governed the USA. At a time when Google is pushing hard to leave its mark in the hardware industry, high production costs and overall high selling prices in the market’s current fierce competition is something Google cannot afford.
The implications of the US/China trade war
While Google’s decision to move pixel phone production out of china was unprecedented, it certainly wasn’t the first. Earlier this year, Google had also moved the production of US-bound Nest devices out of China to Taiwan and Malaysia region to avoid the high tariffs. This trend of moving production out of China to other countries is on the rise. Earlier this year GoPro moved its manufacturing out of China too, and quite a few other brands are rumoured to be moving production out of the communist state soon to avoid USA’s capitalist tariff charges.
Google’s strategy for Pixel Production
A recent report from Nikkei points to Google is likely to partner with FIH Mobile to start Pixel’s production in Vietnam. FIH Mobiles is a sub-brand of Foxconn, the smartphone manufacturing giant that manufactures phone for companies like Apple and Samsung. The production is set to begin in an old phone manufacturing factory that was once owned by Nokia but was later sold to Microsoft until FIH acquired it a while ago. This new production phase is a move that kills two stone with a bird; Not only will Google be able to avoid high labour costs and trade wars in China but also it’ll be able to reduce its product prices in South-east Asia.
As of now, Google is planning to start with moving Pixel 3A’s production to Vietnam first, while other products will follow suit later. Meanwhile, newer products like the upcoming Pixel 4 will continue to be manufactured in China for now, but Google is planning to eventually move all its hardware production, including smartphones and Google Home speakers to Vietnam. It’s worth noting that the factory in Vietnam is located in the Bac Ninh province of Vietnam – the very same Bac Ninh where Samsung began its gigantic smartphone empire’s supply chain a decade ago. Therefore, there will be no shortage of skilled workforce for Google.
Google has high hardware ambitions, which is clear from all the innovations it is making in its products, and much more evident from this large scale production movement. It’s being reported that Google plans to sell anywhere between 8 to 10 million smartphones this year, which is double the number it sold last year.
For now, all eyes are on the upcoming Pixel 4, which seems to be the most promising mid-budget smartphone of the year, as well as Google’s ticket to getting back into the smartphone race. Stay tuned for the latest updates on Google and Google Pixels!