Apple diversifying AirPods supply chain, potentially pushing refresh back

Apple is transferring a substantial part of its current production of AirPods from China to Vietnam, and appears to be considering a release schedule later than previously planned for an AirPods update.

COVID-19 introduced significant delays in global manufacturing. Apple’s third generation refresh of AirPods has been affected. The delay in production had been predicted by Ming-Chi Kuo and now verified by a source close to the situation, according to Nikkei Asian Review.

Apple plans to increase production of the second generation of AirPods, this time outside of China. About 3 to 4 million units, which represents about 30% of conventional AirPods, will be “made in Vietnam,” the sources said. The AirPods Pro are however still produced in China.

Apple has sought to expand its consumer electronics production outside of China, due to both the ongoing pandemic and the recurring trade wars unleashed by the Trump administration.

Vietnam started easing the lock-in measures in April, which would allow easier production of products, such as AirPods, as workers can return to factories.

“Mass production of AirPods in Vietnam began as early as March,” a person familiar with the matter told Nikkei Asian Review. “Vietnamese officials have even granted special permits to a key Apple AirPods assembler to help the company bring engineers to the country for smooth production during the closings.”

The Nikkei Asian Review has an adequate history when it comes to discussing and reporting notable movements in the supply chain. It is significantly worse when it comes to predicting specific Apple plans or product features. The transition to Vietnam for production is more the first than the second.

Apple has always looked for manufacturing sites and suppliers outside of China. Apple’s transition to production of AirPods in Vietnam was probably inevitable, as the company had started trial productions in July 2019.

In February, Apple saw delays and shortages in its supply chain as factories closed to mitigate COVID-19 sp. AirPods were among the first products to experience shortages as the main manufacturers of AirPods stopped most of their production.

Apple supplier Pegatron has also started researching factory sites in Vietnam. It is currently assumed that Pegatron would use the site to produce styli for Samsung mobile devices.

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