AirPods launched in 2016, and AirPods Pro launched in 2019, and they continue to be a massive success. But the move to expand manufacturing isn’t just about keeping up with demand. It’s also a hedge against the trade war between China and the United States.
Manufacturing in Vietnam is a natural alternative for Apple as Chinese components can be easily shipped to Vietnam via land, sea, or air, the person said. Vietnam’s labor costs are roughly one-third China’s, while Vietnam’s workforce is flush with fresh engineering graduates, the person added. South Korean electronics firms like Samsung and LG have moved some production to Vietnam over the past few years, and Apple’s largest assembling contractor, Foxconn, also has set up shop in Vietnam.
Vietnam is working with companies that want to expand there with subsidies or tax breaks.