Tech behemoth Apple Inc. is for the first time planning to allocate product development resources for its iPad range to Vietnam, according to sources cited by Nikkei Asia. This move marks a significant shift in the tech giant's manufacturing strategy.
Nikkei reports that Apple is working with BYD from China - a principal iPad assembly partner - to transfer New Product Introduction (NPI) resources to Vietnam. NPI is the process of launching a new product, typically involving several stages such as research and development, testing, prototype production, followed by mass production and product marketing.
This initiative represents the first time Apple has moved NPI resources to Vietnam for a core device like the iPad.
Technical verification processes for producing trial models of the new iPad are expected to commence in mid-February 2024, with the model potentially ready for launch in the latter half of the following year.
In 2022, BYD became the first Apple supplier to help the American tech behemoth shift its iPad assembly line to Vietnam. The NPI resource shift will focus on lower-tier models rather than the high-end iPad Pro.
NPI requires significant resources from both the technology company and the supplier, such as engineers and investment in laboratory equipment to test new features and functions. Most of Apple's NPI has been conducted in China to leverage the country's decades-long experience in hardware production.
Recently, however, Apple has been realigning its NPI resources. Alongside Vietnam, the company also plans to move some iPhone NPI processes to India.
Apple dominated the tablet market in the first three quarters of 2023, holding 36.6 per cent market share according to IDC data. Counterpoint Research indicates that around 10 per cent of all iPads were produced in Vietnam this year, with the majority still manufactured in China.
Vietnam has emerged as a key technology production hub for Apple outside China. The company has requested suppliers to build and expand capacity in Vietnam for nearly all its products, excluding iPhones - from AirPods and MacBooks to Apple Watches and iPads.
Experts believe that having NPI resources means that centres outside China will become genuine alternate production bases.
Ivan Lam, a technology analyst at Counterpoint Research, assesses Vietnam as playing a pivotal role and possessing the potential to become one of the next global manufacturing hubs.
"Apple's recent supply chain map demonstrates the capabilities of Vietnam's manufacturing base in producing iPads and expanding its scale," he said.
According to Bryan Ma, vice president of Client Devices Research at IDC, Vietnam is among the beneficiaries of the diversification efforts in the device industry, not limited to tablets but also encompassing more complex personal computers. "The movement of the entire ecosystem following the assemblers is crucial, particularly with laptops, where there are many more separate parts," he said.
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