Apple Producing AirPods 3 in China Instead of Vietnam Due to Pandemic Disruption
Apple has been seeking to add geographic diversity to its supply chain for some time, with a shift of some production of the AirPods lineup to Vietnam being one significant step for the company.
Apple reportedly began trialing production of regular AirPods in Vietnam over a year ago, and it was reported in December that Apple's AirPods suppliers were looking to line up financing to expand production.
Originally, those plans also included the upcoming AirPods 3, but those plans have changed. According to a new report from Nikkei Asia, Apple has had to begin mass producing the third-generation AirPods in China rather than Vietnam because of disruptions related to COVID-19 outbreaks.
Apple will start mass-producing its latest AirPods earphones in China instead of in Vietnam as previously planned, two people familiar with the situation said. The company still hopes to move around 20% of new AirPods production to Vietnam later, they said.
Apple's plan to bring some MacBook and iPad production to Vietnam has also been put on hold due to stricter border control measures in China and Vietnam, which has resulted in a lack of engineering resources and an incomplete supply chain, according to the report.
One of the problems is said to be the need for so-called "new product introductions," where companies and suppliers work together to develop and produce a completely new product. This has been especially difficult in Vietnam due to the lack of engineers able to work on AirPods 3 and other new devices.
Following the height of U.S.-China trade tensions two years ago, Apple, Google, and Amazon all initiated moves to shift some production to Vietnam. Google had intended to produce the Pixel 5 range there early last year, but the smartphones ended up being made in China.
Meanwhile, Amazon is facing delays in the production of smart doorbells, security cameras, and smart speakers, as assembly lines in the northern part of the country coped with a surge in local COVID cases and tougher infection prevention measures.
According to an IDC analyst quoted in the report, any setback for Vietnam is likely to be temporary, as the country has already established itself as a key alternative manufacturing location outside of China.
Apple's forthcoming third-generation AirPods are expected to adopt a form factor similar to the AirPods Pro, featuring a new case, a shorter stem, and perhaps replaceable ear tips.
The new AirPods were initially rumored to be launching in the first half of 2021, but in March, Apple analyst Ming-Chi Kuo and DigiTimes said that they're not expected until later in the year, with mass production to begin in the third quarter, which means the new version will likely launch in September alongside new iPhones.