Tech

Apple to move key iPad engineering resources to Vietnam

Apple is for the first time allocating product development resources for the iPad to Vietnam, sources briefed on the matter said, a major step toward strengthening the Southeast Asian country’s position as an alternative manufacturing hub outside of China.

Apple is working with China’s BYD, a key iPad assembler, to move new product introduction (NPI) resources to Vietnam. NPI involves a tech company like Apple collaborating with suppliers on the design and development of new products to make sure the blueprints are doable. This is the first time Apple has shifted NPI resources to Vietnam for such a core device.

Engineering verification for test production of an iPad model will start around mid-February next year, sources told . The model will be available in the second half of next year.

BYD was also the first Apple supplier to help the U.S. tech titan shift iPad assembly for the first time to Vietnam in 2022, Nikkei reported earlier. This shift of NPI engineering resources is focused on entry-level models rather than the premium iPad Pro.

NPI demands substantial resources both from the tech company and its suppliers, such as engineers and investment in lab equipment for testing new features and functions.

Most of Apple’s NPI is carried out in China, in collaboration with engineers in Cupertino, to take advantage of the country’s decadeslong experience in hardware manufacturing. But geopolitical uncertainties are forcing the company to rethink this approach. Apple also plans to send some NPI processes for the iPhone to India, Nikkei Asia reported earlier.

Apple is the world’s biggest tablet maker, with a market share of 36.6% in the first three quarters of 2023, IDC data showed. According to Counterpoint Research, only about 10% of all iPads were built in Vietnam this year but the majority is still in China.

Vietnam has emerged as the most important tech manufacturing hub for Apple outside of China. The Cupertino-based tech giant has asked suppliers to build new capacity for nearly all of its products except the iPhone — from AirPods and MacBooks to Apple Watches and iPads — in the Southeast Asian country. Having overseas NPI resources means non-China hubs will become a true alternative manufacturing base, industry executives and experts said.

“Vietnam consistently plays a crucial and strategic role in manufacturing, acting as a hub and potentially becoming one of the next global manufacturing centers,” said Ivan Lam, a tech analyst at Counterpoint Research. “Apple’s recent supply chain mapping has demonstrated the capability of its production site in Vietnam to manufacture the iPad and scale up production.”

“Given the current maturation of production conditions and the reduction in the difficulty level of iPad manufacturing, including modularization and NPI in the local Vietnamese context, it’s only a matter of time before this becomes a reality. However, Vietnam will initially prioritize non-pro models,” he added.

Bryan Ma, vice president of client devices research with IDC, said Vietnam is one of the beneficiaries of the device industry’s diversification efforts, including not just tablets but also personal computers, which are even more complicated to manufacture. “Having the entire ecosystem moving with the assemblers is important, particularly for notebooks, where there are more discrete parts,” he said.

“After these years of shift, we really find places in India and Vietnam emerge as two very important manufacturing ecosystems,” said Vincent Chen, president of CTBC Securities Investment Service and a veteran tech analyst. “But it’s also clear that despite U.S.-China tension, Apple will still work quite closely with Chinese suppliers in its shift of supply chain.”

[Source]

Nadia24x7

Nadia24x7.in is an Entertainment Media Site that provides the latest News on Celebrities, Biographies, Movies, TV shows, Awards, Affair Gossip, and all other Stuff.

Related Articles

Back to top button