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Apple is moving a significant portion of iPad production from China to Vietnam

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In the past couple of years, Apple has slowly been diversifying the production of its devices away from China, with Vietnam and India being the key beneficiaries. Now, the company is looking to move a significant portion of iPad production to Vietnam, marking the first time that China’s monopoly over iPad production is disrupted. Notably, Apple went ahead with the mass production of AirPods in Vietnam for the first time earlier in 2020.

“Sources said iPad production will begin in Vietnam as early as the middle of this year, marking the first time that the world’s biggest tablet maker will build a significant number of the devices outside of China,” said a Nikkei Asia report. But Apple is not stopping at iPads. The Cupertino giant is also giving a boost to iPhone production in India and aims to start assembling the iPhone 12 series in India in the ongoing quarter. To recall, Apple began making the iPhone 11 in India back in July last year.

A slow, but steady production exodus away from China

“In Vietnam, Apple is mobilizing suppliers to expand production capacity for the latest HomePod mini, the affordable version of its voice-activated smart speaker lineup,” the report adds. “The Cupertino-based tech giant has already increased local production of its audio-related products, including its various AirPods lineups, sources said.”

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Aside from offloading iPad production away from China and into Vietnam, the company is also ramping up the production capacity of other products such as smartphones and audio wearables in other South Asian countries. However, the move is not surprising. Back in November, it was reported that key supplier Foxconn has been asked by Apple to move some portion of iPad and MacBook assembly to Vietnam, adding that the assembly line will become operational in the first half of 2021.

US-China trade tensions, rising labor costs and a need to diversify production

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Apple’s diversification strategy for making its core products away from China was highlighted by Nikkei way back in June 2019, with the report claiming that Apple has asked suppliers to explore moving 15% to 30% of production from China to other South-East Asian countries.

Another report that came out in August of 2019 mentioned that the US government has asked Apple to look for alternative production spots, thanks in no part to the ongoing trade war with China and the imposition of exorbitant tariffs. Aside from the US-China tiff, rising labor costs and risks of overly centralizing production to just one country are being cited as the other key reasons for Apple looking elsewhere, subsequently setting its sights on Vietnam and India.

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