Google is speeding up efforts to shift its product manufacturing process away from China, something that got kicked up a notch last year thanks to the US-China trade war and is now an even higher priority as a result of the coronavirus outbreak that originated in China. This led to Google’s Pixel 4 phone being manufactured partly in Vietnam, with the company planning to repeat that again this year with its new low-cost Pixel 4a as well as its next flagship model.
That’s according to anonymous industry sources who confirm that Google is moving farther away from its default posture of making almost all of its smartphones in China, where the latest data shows more than 78,000 cases of the coronavirus having been reported in mainland China to-date. Per Nikkei Asian Review, Google has even gone as far as asking suppliers to look at the feasibility and potential cost of uninstalling some production equipment in China and shipping it to Vietnam.
Google is not as heavily tied to China from a manufacturing standpoint as a company like Apple is, so a move like this doesn’t entail the logistic headache that you might imagine. Google shipped 7 million smartphone units last year, compared to the 200 million or so Apple sells every year, according to data from IDC.
The timeframe for production of Google’s new phones in Vietnam would be as follows: The phone expected to be named the 4a would get started as soon as April, while the Pixel 5 production would get started at some point in the second half of this year.
This shift is both fortuitous and yet still problematic for Google, which had already converted a factory in Vietnam for exactly the kind of production it will now be ramping up there. However, there’s still one hiccup the company hasn’t figured out how to overcome yet — the fact that many of the components that need to be supplied for the Pixel production still come from within China. “It’s reasonable for companies like Google to want to speed up its pace of diversifying from China amid the coronavirus threat, while the trade war remains an uncertainty,” an IDC executive told Nikkei. “But even if the final assembly process is outside of China, suppliers still need to ship some components from the country … It’s a matter of the supply chain ecosystem, which takes time to rebuild.”