• The company aims establish a low-cost supply chain across Southeast Asia which will work as a springboard for its increasing hardware ambitions.
• The production lines of Vietnam will play a crucial role in Google’s drive for growth in mobile market.

Google, the tech giant, reportedly announced the shifting of its Pixel smartphone production base to Vietnam from China as the company aims to establish a low-cost supply chain across Southeast Asia that will work as a springboard for its increasing hardware ambitions.

The aggressive move to build a Vietnamese production base comes owing to two reasons. First, increasing Chinese labor costs and second, spiraling tariffs caused due to the ongoing trade war between Beijing and Washington. The company has intentions to move most American-bound production outside China, including its famous smart speaker, Google Home and Pixel phones.

Reports cite, production lines in Vietnam will play a crucial role in Google’s drive for growth in mobile market. Google plans to ship approximately 8 million to 10 million smartphones by the end of the year, a number which is double of the one recorded last year.

Google’s Pixel smartphone is not a big player in the smartphone market, it doesn’t even fall in the top global 10, however, the smartphone brand is growing rapidly.

This aggressive campaign of the company is expected to put pressure on tier-two mobile makers like Sony and LG Electronics, which are struggling to come up again as the market undergoes its third successive year of decline.

According to IDC, Google sold almost 70% of its Pixel smartphones in the United States, followed by Japan and UK. Meanwhile, 64% of smart speakers were also sold in the US.

According to some trusted sources, smart speakers’ production can possibly be moved to Thailand. However, the company’s initial production and new product development for the hardware lineup will stay in China.

Google sold 4.7 million Pixel smartphones last year, representing just 0.3% of market share globally, however, it has already sold 4.1 million in the first half of 2019.

Source Credit: https://asia.nikkei.com/Spotlight/Tech-scroll-Asia/Google-to-shift-Pixel-smartphone-production-from-China-to-Vietnam