Trade war escalation. Search engine giant set to shift production of Pixel smartphones from China to Vietnam
Google has developed plans to move production of its Pixel smartphones away from the Chinese mainland, and instead make them in Vietnam.
According to Japanese news outlet Nikkei Asian Review, Google is “moving aggressively to shift production of its Pixel smartphone from China to Vietnam.”
The move comes amid a growing trade war between the United States under President Donald Trump, and China. In June it was reported that Apple was exploring its options to move between 15 to 30 percent of manufacturing out of China.
From this summer, Google has reportedly begun working with a partner to convert an old Nokia factory in the northern Vietnamese province of Bac Ninh. This factory will be used to produce Pixel phones, two people familiar with the company’s plans told Nikkei.
And the report said that this is the same province where Samsung developed its smartphone supply chain a decade ago, so Google will have access to an experienced workforce.
The report says that the trade war and the ensuring tarrifs between the US and China is not the only reason for the move, as companies are also having to contend with higher labour costs in China as well.
Google reportedly intends to eventually move production of most of its American-bound hardware outside of China, including Pixel phones and its popular smart speaker, Google Home, the sources told Nikkei.
So it seems that Vietnam is going to be a key manufacturing location for Google as it seeks to grow its smartphone operation. Sources told the Japanese newspaper that Google aims to ship some 8 million to 10 million smartphones this year, double from a year ago.
Google’s Pixel smartphones have yet to make an appearance in the top ten phone maker rankings from Counterpoint, but it is growing rapidly.
Google of course surprised some when in May it launched the mid-priced Pixel 3a and 3a XL smartphones.
Google had only launched its Pixel 3 smartphones back in 2018, and those handsets included two front-facing cameras for “group selfie” shots that were ‘guided’ by artificial intelligence (AI).
But with the Pixel 3a, it is clear that Google is seeking to offer a budget smartphone, that comes with mid-range specs but which includes the same powerful camera as its more pricer stable mate, the Pixel 3.
Prices in the US start at just $399 for the 5.6-inch display and $479 for the 6-inch model.