A source has revealed that beginning in 2019, Google will no longer manufacture its Pixel smartphones, smartwatches, and wireless earbuds in China. This move comes as tech companies are being pushed to diversify their supply chains by ongoing tensions between the US and China. To lessen its reliance on China, the firm has been increasing production capacity in Vietnam and India during the past few years. According to a source, Google is now certain that it can relocate all Pixel manufacture from China by 2027, even if a significant portion of its production is still located in the country. The decision was made by Google after its high-end Pixel smartphones were developed and produced successfully in Vietnam this year. The source stated that Google has been encouraged to adhere to its 2027 target by the development in Vietnam, as making advanced smartphones is more complex than producing smartwatches and wireless earbuds.
If everything goes according to plan, Google will join Samsung as the only major global smartphone manufacturer to end smartphone production in China. An anonymous insider told the publication that Google doesn’t have to worry about leaving the Chinese market as it doesn’t sell Pixel phones there. This comes after rumours circulated that Google was shifting the development of its upcoming high-end Pixel devices from China to Vietnam. Regardless of the dramatic increase in the price of memory chips, Google is still aiming to boost Pixel sales. From 12 million devices last year, the company has informed suppliers that it anticipates an 8-10% increase in Pixel shipments this year, according to the article. If Google wants more people to use its Gemini AI services, it needs to increase the number of people using its smartphones. This is why, among other things, the business is trying to keep the surge in Pixel shipments going even when component costs have gone up.
Additionally, Google is making efforts to fortify its negotiating position with memory chip vendors. During negotiations with Micron, Samsung, and SK Hynix, it allegedly bundled orders for chips used in its cloud-computing business with orders for smartphones. According to the source, Google was one of the few smartphone manufacturers that had not lowered its shipping target for the year. The source also included Xiaomi and another component supplier. If Apple were to increase the price of the iPhone, the executive continued, Google might steal market share from the tech company in the United States, Japan, and Europe. A week ago, Google unveiled their new Pixel 11, Pixel 11 Pro, and Pixel 11 Pro Fold smartphones. In comparison to the previous-generation Pixel 10, which started at $799 for 128GB of storage, the new models start at $899 for the 256GB variants.
Not only is Google attempting to keep shipping growth going despite growing memory chip costs, but so are other smartphone companies. Reportedly, Apple and Huawei are also planning to boost shipments, according to Nikkei Asia. On the other hand, due to the increased cost of memory and other components, Xiaomi, Oppo, and Vivo have reduced their shipment predictions multiple times this year. Across the board, Apple’s memory chips will cost more this quarter, according to CEO Tim Cook. Some older MacBook and iPad models, along with iPhones sold in Japan, have already seen price increases from the corporation.
