Vietnam has great potential to become the world’s smartphone factory.
According to the latest report by Nikkei, Google has started to move its Pixel smartphone production line from China to Vietnam, while searching and building cheap supply chains in Southeast Asia. This is considered a springboard for Google to realize its ambition to develop its hardware business.
Nikkei said that Google worked with a partner to convert an old Nokia factory in Bac Ninh province, to start producing Pixel smartphones. It is also the northern province where Samsung has developed its smartphone supply chain and manufacturing.
The conversion of production lines from China to Vietnam shows that Google is also concerned about the trade war and tariff barriers between the US and China. According to the report, Google plans to move the entire hardware production line for the US market out of China, including Pixel smartphones and Google Home smart speakers.
Google really has an ambition to develop its hardware segment, aiming to ship 8 million to 10 million smartphones this year, double that of last year. Although on the world smartphone map, Google currently accounts for only a small part, not even ranked in the top 10, but has a very rapid growth rate.
After launching low-cost Pixel smartphones in April, Google became the fifth-largest smartphone maker in the U.S. in Q2 / 2019, gaining market share while the entire industry was in recession. In 2018, the number of Pixel smartphones sold in the U.S. accounted for 70% of Google’s worldwide Pixel smartphone sales.
Therefore, the importance of the US market can be seen, and moving production lines out of China to avoid the influence of tariff barriers between the two countries. Under the current plan, Google will transfer Pixel 3A smartphone production line to Vietnam before the end of this year.
Analysts say Google’s smartphone business is still relatively small, so moving production lines out of China is not too difficult. Google has yet to respond officially to Nikkei’s report.