Apple has been planning on moving some production of its AirPods lineup to Vietnam, as part of an overall effort to diversify its supply chain and relieve some of its dependence on China.
Apple reportedly began trialing production of its regular AirPods in Vietnam more than a year ago, and a December report claimed Apple’s AirPods supply partners were looking for financing to expand their production.
Apple’s AirPods 3 production was intended to be a part of the move to Vietnam. However, those plans have changed, as a new report from Nikkei Asia says Apple has been forced to begin production on its third-generation AirPods in China instead of Vietnam, because of COVID-19 disruptions.
Apple will start mass-producing its latest AirPods earphones in China instead of in Vietnam as previously planned, two people familiar with the situation said. The company still hopes to move around 20% of new AirPods production to Vietnam later, they said.
Apple had plans to move some MacBook and iPad production to Vietnam but those plans have been put on hold due to stricter border control measures in China and Vietnam, which has resulted in a lack of engineering resources and an incomplete supply chain.
Apple has faced a shortage of engineers to work on AirPods 3 and other new devices. Apple traditionally performs “new product introductions,” where companies and suppliers work together to develop and produce a completely new product. The COVID-19 pandemic has made that difficult.
Apple is not the only tech firm to see its plans to move production from China foiled by the pandemic. Google and Amazon had both made plans to move some device production out of China.
Google had planned to produce its Pixel 5 phone lineup in Vietnam last year, but the smartphones ended up being produced in China. Meanwhile, Amazon is facing delays in the production of its smart devices, including speakers, doorbells, and other products.
An IDC analyst quoted in the report said any setback for Vietnam is likely to be temporary, as the country has already established itself as a key alternative manufacturing location outside of China.