New Delhi: Google is reportedly about to terminate the manufacturing of its Pixel smartphones, Pixel Watch models, Pixel Buds in China by 2027. The company has announced to suppliers that it has decided to shift all Pixel hardware production out of China, according to a report by Nikkei Asia. Google itself hasn’t come out with an official statement yet on the reported plan.
Why is Google leaving China?
The primary motive seems to be increasing supply-chain risk due to the escalating tensions between the US and China. Google is an American firm, and tensions between Washington and Beijing have begun to grow in the wake of trade restrictions, tariffs and conflicts over technologies.
Relying too heavily on China for production may pose problems if China either puts in place new trade restrictions or other geopolitical challenges impact the shipment of products and components. By shifting production to other countries, this allows the company to be more flexible and less tied down to one manufacturing base.
But that doesn’t mean that Google is exiting China because of the high manufacturing costs. The primary problem is diversification and minimizing risk on the long-run.
Why India and Vietnam?
Google has already been ramping up Pixel production in Vietnam and India. Google has jumped into developing and manufacturing high-end Pixel devices in Vietnam, making it a significant market for the company.
The milestone comes after it was announced that the company would introduce a new flagship smartphone this year, which is more complex to manufacture than its earbuds or smartwatch products. Google’s success in Vietnam is said to have made the company confident that it can eventually remove the entire Pixel manufacturing base from China.
India is also poised to be a major part of Google’s manufacturing policy. The firm has already ramped up Pixel manufacturing in India, and the nation’s burgeoning electronics manufacturing ecosystem may enable Google to establish it as an important manufacturing and export hub.
Google has less to lose than Apple
One more point here is that Google sells Pixel phones in China not even to the same extent as Apple sells iPhones in China. This could make it less attractive for Google to continue manufacturing Pixel devices in China.
By comparison, Apple’s ties with China are very strong, as are those of its manufacturing network. Google is thus less risk in moving its production elsewhere without potentially jeopardizing a major consumer market.
What does this mean for Pixel users?
The transition won’t appear to negatively affect Pixel production or the Pixel name. Rather, these mobiles will be assembled in other countries.
Google’s reported plans demonstrate how big tech firms are seeking to create more flexible supply chains. Google’s move to Indian and Vietnam markets for Pixel production is primarily driven by a desire to cut down on reliance on China, trade and geopolitical risks, and setting up manufacturing capabilities to meet future Pixel and AI goals.
