According to Nikkei Asia, Apple has, for the first time, allocated iPad product development resources to Vietnam, marking a significant move to strengthen the position of this Southeast Asian country.
In collaboration with BYD, a key iPad manufacturing partner, Apple has shifted New Product Introduction (NPI) resources to Vietnam. NPI is the collaborative process where technology companies work with suppliers on new product design and development to ensure functional designs. This marks the first instance of Apple transferring NPI resources to Vietnam for such a crucial device.
Sources informed Nikkei Asia that the technical appraisal process for the trial production of the iPad model is set to commence around mid-February 2024, with the model expected to be available in the second half of the following year.
BYD, Apple’s significant manufacturing partner, was also the first to relocate its iPad assembly line to Vietnam last year. However, this shift in NPI engineering resources focuses on lower-end models rather than the iPad Pro.
The NPI process demands substantial resources from both technology companies and suppliers, including engineers and investments in lab equipment to test new features and functionality. Apple also plans to extend some iPhone NPI processes to India.
Data from IDC indicates that Apple is the world’s leading tablet maker, with a market share of 36.6% in the first three quarters of the year. Nevertheless, Counterpoint Research suggests that only about 10% of all iPads were produced in Vietnam this year, with the majority still manufactured in China.
Nikkei Asia observes that Vietnam is emerging as Apple’s most crucial production center outside of China. While Apple has urged suppliers to establish new production facilities for nearly all its products in Vietnam, excluding iPhones, the country is becoming increasingly central to Apple’s manufacturing strategy.
Ivan Lam, a technology analyst at Counterpoint Research, notes that Vietnam plays a pivotal role in Apple’s manufacturing strategy and has the potential to become a global manufacturing hub. He emphasizes that, given Vietnam’s current ideal production conditions and the lower difficulty level in iPad production, it is only a matter of time before Vietnam becomes an iPad production base, with an initial focus on non-professional products in sample form.
Bryan Ma, Vice President of IDC’s consumer device research, acknowledges that Vietnam is benefiting from the technology industry’s efforts to diversify the supply chain, encompassing not only tablets but also more complex products like personal computers.
Vincent Chen, President of CTBC Securities Investment Services, highlights the emergence of India and Vietnam as two crucial manufacturing ecosystems. He notes, however, that during the supply chain transition, Apple will continue to closely collaborate with Chinese suppliers.
As of now, Apple and BYD have not responded to Nikkei’s request for comments.