Apple is reportedly in negotiation to make Apple Watches and Macbooks in Vietnam for the first time, a report in Nikkei Asia claimed this week.
Following this claim, analysts Ming-Chi Kuo noted that Vietnam is actually responsible for manufacturing and shipping units of the said products.
With the upcoming launch of Series 8, suppliers in Vietnam will reportedly increase the production of the Apple Watch, as per 9to5Mac report.
Apple Considers Starting a Production Line of iPhone 14 in India
On his Twitter posts, Kuo detailed that Luxshare ICT, one of Apple's largest suppliers, already established production lines in China and Vietnam.
The analysts claimed that for a while now, some of the Apple Watch Series 7 units have been actually shipping from Vietnam.
Kuo said that some changes are to be expected this year, as he believes that when Apple Watch Series 8 is released this fall, "the proportion of Apple Watch models assembled in Vietnam will increase to as much as 70%," as reported by 9to5Mac.
Of Apple's Chinese suppliers outside of China, Luxshare "is the leader in building production lines."
According to 9to5Mac, Apple would be able to protect itself from the "deglobalization trend" with its move of transferring Apple Watch production from China to Vietnam.
Kuo also revealed more recently that a plan to start production of at least one model of the iPhone 14 lineup in India, simultaneously with China, is being considered by Apple.
While the production capacity in India won't be enough to address the production challenges in China, Kuo believes that it's still an "important milestone for Apple" particularly when it comes to diversifying its production lines.
Recently, there have been some disagreement between the US government and China. These disagreements are affecting many companies that depend on Chinese suppliers.
Apple has taken actions by spreading the production of its products to more countries such as India and Brazil.
However, moving the production line in other countries is not after addressing the global demand but rather supplying the local markets.
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Apple is Diversifying Production Away From China
The latest move of Apple to make Apple Watches and MacBooks in Vietnam seems to a part of a plan to diversify production away from China.
According to Nikkei Asia, test production of Apple Watch was started by Luxshare Precision Industry and Foxconn in northern Vietnam.
The move of the company aims to produce the Apple Watch outside of China for the very first time.
In the past, Vietnam is already producing a wide range of Apple products such as iPad and AirPods. The country has been Apple's most important production hub outside of China.
When it comes to the Apple Watch, it is even more complicated, as it requires "squeezing so many components into such a small case," as per Nikkei Asia. This kind of work needs a high degree of technological skill.
After the massive supply chain disruptions caused by COVID-related lockdowns in Shanghai, Apple has kept on moving the iPad production to Vietnam.
According to Nikkei Asia, Apple is also negotiating with suppliers to establish test production lines for its HomePod in Vietnam.
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