Apple Shifts Key iPad Engineering to Vietnam, Reducing China Reliance

(According to Nikkei Asia- December 8, 2023, Reuters) Apple is moving new product introduction (NPI) resources for an iPad model to Vietnam for the first time. NPI involves collaborating with suppliers on design and ensuring manufacturability.

The shift sees Apple partner with Chinese company BYD, a major iPad assembler, to allocate NPI resources to Vietnam. Engineering verification for test production on an iPad model will start by mid-February 2024. The tablet will launch in the second half of 2024.

The NPI transfer focuses on entry-level iPads rather than premium iPad Pro models. It requires substantial resources from Apple and suppliers, like engineers and lab investments.

Most Apple NPI currently occurs in China, tapping its hardware experience. But geopolitics now push Cupertino to diversify. Apple also plans sending some iPhone NPI to India.

Apple dominates tablets with a 36.6% market share. Though most iPads still produce in China, Vietnam manufactures around 10% and grows.

The company positioned Vietnam as the key non-China hub for nearly all products except iPhones. These include AirPods, MacBooks, Watches, and iPads. Shifting NPI resources makes Vietnam a true alternative base, say experts.

Analyst Ivan Lam says Vietnam plays a “crucial, strategic role” in manufacturing. He sees it becoming a global production center. Apple’s supply chain maps show Vietnam’s iPad capabilities. More models will likely follow.

Despite U.S.-China tensions, Apple will keep working closely with Chinese suppliers per analyst Vincent Chen. But India and Vietnam emerge as vital new manufacturing ecosystems.

India and Vietnam emerge as vital new manufacturing ecosystems.
India and Vietnam emerge as vital new manufacturing ecosystems.

The NPI transfer flags Vietnam’s importance for Apple’s diversification from China. It also shows the difficulty of moving tablet engineering resources outside the country.

– Jim Miller

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