KEY POINTS

  • Apple has a contingency plan in case the phase one deal of the US-China trade war fails, and tariffs are reinstated
  • The Cupertino company is moving production of AirPods Pro and AirPods from China to Vietnam
  • Giertek and LuxShare are now looking for additional funds to increase the production of Apple's wireless earbuds in Vietnam

While there has been a recent development, the current trade war between the US and China is far from over. Apple knows this, and it has a contingency plan, including moving its production outside China. The Cupertino company seems to have the program up and running, considering that LuxShare and Giertek are now seeking investments to move production of both Apple AirPods and AirPods Pro to Vietnam.

Both Giertek and LuxShare are now looking for hundreds of millions of dollars for the production of Apple AirPods Pro and AirPods, according to a report by The Information. The move is being undertaken to diversify the supply chain of the Cupertino company as well as to continue to shift production outside China should the phase one trade deal collapses, and tariffs are reinstated, the report adds.

In July of this year, Giertek started manufacturing (on a trial basis) Lightning cables and AirPods in Vietnam. During that time, several close to the operation revealed that Apple asked suppliers of the Airpods’ components to support the efforts of Giertek even if it is only at its initial production run. But, the latest report from The Information suggests that the company would raise the production of AirPods following the initial trial run.

Components sourced in China are easier to ship to Vietnam, and the labor cost in the country is around a third of that in China. Apple launched the Apple AirPods in 2016 as its first product in the wireless headphone market. The product was an instant success, which was followed by the second generation Apple AirPods Pro this year, which features the efficient H1 processor as well as the Hey Siri functionality.

The Apple AirPods Pro introduces the much-awaited noise-canceling capabilities, a totally redesigned chassis, new audio tech, and a lot more. Almost all reviews are positive, praising the higher audio quality of the latest wireless earbuds from Apple and its increased functionality compare to rival earbuds and older models. Given the surprising increase in the demand for Apple AirPods Pro, as well as the unpredictable consequences of the US-China trade war, the Cupertino company is making a bold but calculated move to meet demands.