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Apple to move key iPad engineering resources to Vietnam

121 points by firstSpeaker 3y ago

ngcc_hk 3y ago
I wonder given Vietnam is also a communist country why there. How about Thailand or India …
- zarzavat 3y ago
  Many of the countries in the region are communist. What sets China apart is that it is a world power competing with the US. Nothing to do with communism.
  - petesergeant 3y ago
    None of the other communist countries in the region are anything like Vietnam, and the idea of moving high-tech manufacturing to Laos, Cambodia, or North Korea is ludicrous.
- Ridj48dhsnsh 3y ago
  Have you ever visited Vietnam? The people I've met there are highly motivated to build successful businesses, even more so than in many western countries.
- starship1 3y ago
  India is fast becoming a facist & anti-democratic anti-mi minority country, not safe to invest under Modi whois trying to be Indian Hitler 2002.
- vidarh 3y ago
  Because whatever you want to label Vietnam, in terms of business what matters is that it's fairly deregulated and open for international companies, and has been for decades, offers significant tax breaks for hitech manufacturing, and has a cheap workforce and an established supply chain. India or Thailand might well also be competitive, but it's not a given they're any more attractive. If you mean to suggest there'd be the same risks as China, consider that Vietnam has consistently kept a certain distance to China, and have shared concerns with the US over Chinese expansionism. They're not particularly ideologically close, and politically there are few potential situations where deteriorating relationships between the US and China will negatively affect US-Vietnam relations, and some where it might improve them (e.g. if the issues in the South China sea escalates).
- latchkey 3y ago
  The government is communist, but the people are not. If you've ever spent any time in Vietnam, you'd understand that.
  - resolutebat 3y ago
    TBH even the government is Communist in name only. Vietnam is furiously entrepreneurial and the government mostly gets out of the way, unless it feels threatened and then it comes down like a ton of bricks.
    - latchkey 3y ago
      https://www.politico.com/story/2017/02/clinton-ends-vietnam-trade-embargo-feb-3-1994-234390 https://www.politico.com/story/2017/02/clinton-ends-vietnam-...
- wtmt 3y ago
  The news reports here in India say that there’s a lot of red tape and delays in India. Ease of doing business is lower compared to Vietnam. The policies are protectionist and restrictive. The labor laws are, to some extent, protective of employees. This is something Apple has been reported as not being happy about (but things are changing). Apple already has a growing iPhone assembly base in India, which is set to go to 25% of its total iPhone production within a few years. While Apple is still looking for low cost production, I’m sure it doesn’t want a repeat of China by concentrating a lot on one or two countries. I think the current moves are a temporary aberration, since concentrating iPhones in India, iPads and Macs in Vietnam and so on doesn’t diversify the risk as much as ensuring that every product is assembled in more than one country. I’m sure Tim Cook is spending a lot of time working on such measures to de-risk manufacturing and maintaining the company’s profit margins. All the countries that support low cost assembly and manufacturing in Asia have different kinds of problems as far as governments, policies and stability are concerned. Apple or any other company has to figure out the right mix and plans.
MuffinFlavored 3y ago
Slightly related genuine question: Why do Apple/Meta/Microsoft pay $300k-$1m/yr for American engineers (salary + stock compensation) from an international perspective? Capitalism states (sort of) that there's competition and an inherit race to the bottom. Companies have a motive to spend as little and get as much for their buck as possible. Globally, how is paying somebody $300k/yr in America (expensive) the best option in terms of getting development done? Is the answer really "quality"? Aren't engineer salaries much lower in Europe? What about Asia? South America (Brazil)?
- yuppie_scum 3y ago
  Quality just isn’t there with offshoring due to the time zone difference and distance. Accountability isn’t there. The development savings will be offset by onshore QA, PM, Project management and rework by onshore devs. Been seeing that play out again and again for 20 years. I have seen slightly better results with offshoring from Latin America - fast feedback makes a huge difference - being able to meet frequently and provide feedback in the same time zone makes a huge huge difference. I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over.
  - lokar 3y ago
    Also, these companies tend to be lead by engineers. They identify with the engineers and believe that this work (and thus themselves) is special. Not the case with say auto manufacturers.
    - MuffinFlavored 3y ago
      Who is to say the future will "remain this way" for engineers? When will it become more of a commodity?
      - lokar 3y ago
        More and more these companies are lead by groups of people who have never worked as an engineer.
vkdelta 3y ago
This looks more of manufacturing resources to work with Vietnam based contract manufacturers. It is not moving US based core engg (software, cpu design, etc) to Vietnam.
- jfghi 3y ago
  Yet
  - theGnuMe 3y ago
    don't worry software and cpu design will be AI driven.
    - Muromec 3y ago
      Everybody knows that by 2000 we will finally reach Communism end game and nobody will have to work that much. Or at least that’s what my grandpa believed.
      - onetokeoverthe 3y ago
        [dead]
- FirmwareBurner 3y ago
  >It is not moving US based core engg Manufacturing is also becoming a core engg. Just ask the semiconductor industry. That was also offshored to Asia from the west by the metric boatload because it was not considered high value and prestigious enough, and now we depend on Asia for the most high value cutting edge chips which power our ... everything, as the western companies have fallen behind and are left with the manufacturing of low value chips. How ironic. Reminds me of that scene form 'Back to the future' where 1955 Doc finds a faulty chip in the DeLorean's time travel circuit and says "No wonder it failed, it says Made in Japan", then Marty explains to him that in 1985 all the best stuff is made in Japan. That scene aged like wine. It's all fun and games until you have another global supply chain disruption because some component you thought is irelevant but you now find out is only made in one country that now decides not to play ball or is vulnerable to an aggressor or a natural calamity, and you can't fix it because there's no equivalent manufacturing capacity or even know-how left in the west anymore, as it was all offshored 20+ years ago so everyone who knew that field well, is now retired or doing some other job. But hey, at least some execs got some fat bonuses and career changing promotions out of it.
sneak 3y ago
Right now, everyone at Apple and everyone in the USG knows that an all out trade war (or, heaven forbid, war war) between the US and China means that the head and body of the sometimes-largest US company get severed. It behooves Apple and everyone on Team USA to do everything possible to make Apple be able to survive a corporate beheading ifwhen they become unable to manufacture in China. They’ve started moving AirPods (India and Vietnam), some iPhones (India), and now iPads (Vietnam). Apple’s scale is immense, and a full replacement strategy is maybe the largest project they have ever undertaken, and certainly the largest that doesn’t get announced as some cool new product.
- Morte42 3y ago
  I doubt it has much to do with any impending war, after all Apple is moving to Vietnam with the assistance of a Chinese company that has been established in Vietnam for decades. China's relations with Vietnam go back millennia, they even provided Vietnam with weapons and training during the their wars against France and the US. If anything China is trying to establish itself in Vietnam before anybody else can. Vietnam, Bangladesh, Mexico and Brazil are all increasingly entwined with China when it comes to offshoring cheaper and simpler manufacturing. Expect the above nations to rapidly replace Made in China for many goods like batteries, toys, clothing and much more. In 2018 China's trade balance accounted for 0.66% of their GDP. In 2019 it was 0.93%. In 2022 it leapt to 3.21%. In the next couple of years it will likely return to around 2% meaning that the domestic Chinese economy is responsible for adding around 98% of the value to China's GDP every year, the sum of all of China's international trade balance adds 2%. Being the Worlds factory really isn't all its made out to be, China needs to reform itself to make profitable goods not cheap ones if it wants its international trade to be as lucrative as the rest of its economy. They had a plan for 2025 but covid happened so its hard to see how much they were able to offshore, I believe clothing manufacturing has been reduced dramatically in China and they are making fewer batteries but otherwise they are probably still in the cheap industry rut.
- theGnuMe 3y ago
  It could be cost, China might be more expensive than Vietnam. I would think cost may play a role.
hughw 3y ago
"Country risk" is a term used in the oil industry. Is it common elsewhere?
- selectodude 3y ago
  I imagine with the interesting geopolitical situation we all find ourselves in, if it wasn't before it sure as shit will be now.
- oblio 3y ago
  I imagine it's common for all strategic resources.
RCitronsBroker 3y ago
i feel like this is largely motivated by growing qualms over being highly dependent on China. They are not alone by far, but Apple truly is an extraordinary case of being enitrely at the mercy of china playing their role. COVID was the event that lowered the tide enough to, painfully so, expose whos swimming naked. Now, add growing concerns over IP protection plus political volatility, and you have a situation that makes shareholders and executives queasy when rethinking their current position. China also isnt as cheap as it used to be, has economic troubles and faces an impending population collapse. Thats one hell of an uncertain future, soon-to-be superpowers dont tend to suddenly stop providing key metrics regarding their population and economy. Lets see how they handle their own personal 2008, Evergrande aint lookin too good either.
- yieldcrv 3y ago
  Vietnam is a single party state capitalist system nominally called the Communist Party that teaches the same Marxist ideology as China. Vietnam's head of state and head of party can serve just as many terms as Xi Jinping has so far. Vietnam's system as all the same trappings as China's when it comes to political dissent or anything that can "undermine the territorial sovereignty and unity", an idea that can be used to control all facets of life. There are major human rights violations and concerns occurring there as well. The general lack of trepidation about Vietnam, from the West, is solely due to Vietnam's irrelevancy, and Vietnam playing their own irrelevancy as friendliness for their own protection, it makes sense and they have no reason to do otherwise. My only point here is that the primary issues we have with China is not their system, just their market power.
  - FirmwareBurner 3y ago
    Your last two paragraphs are bang on the money. Manufacturing is moving to Vietnam because it is politically, economically and militarily weak enough that it can easily be bullied into compliance/submission by the US in case it ever decides to go rogue and threaten US investments, or have the audacity to spin it's own domestic champions to compete with US players. China was also like that 30 years ago but has now become strong and influential enough that it can not longer be bullied into just being the submissive sweatshop of the world it once was. I recommend you watch the video that aged like fine wine: 'Meet King Joe - 1949 - Cold War Era American Propaganda Cartoon': https://www.youtube.com/watch?v=j-6YQQ779YM https://www.youtube.com/watch?v=j-6YQQ779YM
userbinator 3y ago
Ironically, many sites for the repair of phones, laptops, and other consumer electronics --- including Apple products --- are hosted in Vietnam.
andrewstuart 3y ago
Companies all over the world have discovered that the cheap labor authoritarian nation where they did they manufacturing turned out in the end to be a real political problem and business risk, so they're moving their operations to countries that don't have such risks.
- gonzaloalvarez 3y ago
  that don’t have such risks… yet
  - andrewstuart 3y ago
    What are you suggesting?
- KRAKRISMOTT 3y ago
  > Companies all over the world have discovered that the cheap labor authoritarian nation where they did they manufacturing turned out in the end to be a real political problem and business risk, so they're moving their operations to countries that don't have such risks. So they moved from one cheap labor authoritarian nation to the other cheap labor authoritarian nation next door.
- drdaeman 3y ago
  > so they're moving their operations to countries that don't have such risks Did you mean: different cheap labor authoritarian nation?
- Manuel_D 3y ago
  It's not the authoritarianism that's the issue with China. It's the geopolitical rivalry with the US and Taiwan.
  - andrewstuart 3y ago
    >> geopolitical rivalry with the US and Taiwan. The other geopolitical rivalries play a role too, including with Japan, Australia, the Philippines, Malaysia, Vietnam, South Korea, Philippines, Brunei, India,

121 points by firstSpeaker 3y ago

ngcc_hk 3y ago

I wonder given Vietnam is also a communist country why there. How about Thailand or India …

zarzavat 3y ago
Many of the countries in the region are communist. What sets China apart is that it is a world power competing with the US. Nothing to do with communism.
- petesergeant 3y ago
  None of the other communist countries in the region are anything like Vietnam, and the idea of moving high-tech manufacturing to Laos, Cambodia, or North Korea is ludicrous.
Ridj48dhsnsh 3y ago
Have you ever visited Vietnam? The people I've met there are highly motivated to build successful businesses, even more so than in many western countries.
starship1 3y ago
India is fast becoming a facist & anti-democratic anti-mi minority country, not safe to invest under Modi whois trying to be Indian Hitler 2002.
vidarh 3y ago
Because whatever you want to label Vietnam, in terms of business what matters is that it's fairly deregulated and open for international companies, and has been for decades, offers significant tax breaks for hitech manufacturing, and has a cheap workforce and an established supply chain. India or Thailand might well also be competitive, but it's not a given they're any more attractive. If you mean to suggest there'd be the same risks as China, consider that Vietnam has consistently kept a certain distance to China, and have shared concerns with the US over Chinese expansionism. They're not particularly ideologically close, and politically there are few potential situations where deteriorating relationships between the US and China will negatively affect US-Vietnam relations, and some where it might improve them (e.g. if the issues in the South China sea escalates).
latchkey 3y ago
The government is communist, but the people are not. If you've ever spent any time in Vietnam, you'd understand that.
- resolutebat 3y ago
  TBH even the government is Communist in name only. Vietnam is furiously entrepreneurial and the government mostly gets out of the way, unless it feels threatened and then it comes down like a ton of bricks.
  - latchkey 3y ago
    https://www.politico.com/story/2017/02/clinton-ends-vietnam-trade-embargo-feb-3-1994-234390 https://www.politico.com/story/2017/02/clinton-ends-vietnam-...
wtmt 3y ago
The news reports here in India say that there’s a lot of red tape and delays in India. Ease of doing business is lower compared to Vietnam. The policies are protectionist and restrictive. The labor laws are, to some extent, protective of employees. This is something Apple has been reported as not being happy about (but things are changing). Apple already has a growing iPhone assembly base in India, which is set to go to 25% of its total iPhone production within a few years. While Apple is still looking for low cost production, I’m sure it doesn’t want a repeat of China by concentrating a lot on one or two countries. I think the current moves are a temporary aberration, since concentrating iPhones in India, iPads and Macs in Vietnam and so on doesn’t diversify the risk as much as ensuring that every product is assembled in more than one country. I’m sure Tim Cook is spending a lot of time working on such measures to de-risk manufacturing and maintaining the company’s profit margins. All the countries that support low cost assembly and manufacturing in Asia have different kinds of problems as far as governments, policies and stability are concerned. Apple or any other company has to figure out the right mix and plans.

MuffinFlavored 3y ago

Slightly related genuine question: Why do Apple/Meta/Microsoft pay $300k-$1m/yr for American engineers (salary + stock compensation) from an international perspective? Capitalism states (sort of) that there's competition and an inherit race to the bottom. Companies have a motive to spend as little and get as much for their buck as possible. Globally, how is paying somebody $300k/yr in America (expensive) the best option in terms of getting development done? Is the answer really "quality"? Aren't engineer salaries much lower in Europe? What about Asia? South America (Brazil)?

yuppie_scum 3y ago
Quality just isn’t there with offshoring due to the time zone difference and distance. Accountability isn’t there. The development savings will be offset by onshore QA, PM, Project management and rework by onshore devs. Been seeing that play out again and again for 20 years. I have seen slightly better results with offshoring from Latin America - fast feedback makes a huge difference - being able to meet frequently and provide feedback in the same time zone makes a huge huge difference. I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over.
- lokar 3y ago
  Also, these companies tend to be lead by engineers. They identify with the engineers and believe that this work (and thus themselves) is special. Not the case with say auto manufacturers.
  - MuffinFlavored 3y ago
    Who is to say the future will "remain this way" for engineers? When will it become more of a commodity?
    - lokar 3y ago
      More and more these companies are lead by groups of people who have never worked as an engineer.

vkdelta 3y ago

This looks more of manufacturing resources to work with Vietnam based contract manufacturers. It is not moving US based core engg (software, cpu design, etc) to Vietnam.

jfghi 3y ago
Yet
- theGnuMe 3y ago
  don't worry software and cpu design will be AI driven.
  - Muromec 3y ago
    Everybody knows that by 2000 we will finally reach Communism end game and nobody will have to work that much. Or at least that’s what my grandpa believed.
    - onetokeoverthe 3y ago
      [dead]
FirmwareBurner 3y ago
>It is not moving US based core engg Manufacturing is also becoming a core engg. Just ask the semiconductor industry. That was also offshored to Asia from the west by the metric boatload because it was not considered high value and prestigious enough, and now we depend on Asia for the most high value cutting edge chips which power our ... everything, as the western companies have fallen behind and are left with the manufacturing of low value chips. How ironic. Reminds me of that scene form 'Back to the future' where 1955 Doc finds a faulty chip in the DeLorean's time travel circuit and says "No wonder it failed, it says Made in Japan", then Marty explains to him that in 1985 all the best stuff is made in Japan. That scene aged like wine. It's all fun and games until you have another global supply chain disruption because some component you thought is irelevant but you now find out is only made in one country that now decides not to play ball or is vulnerable to an aggressor or a natural calamity, and you can't fix it because there's no equivalent manufacturing capacity or even know-how left in the west anymore, as it was all offshored 20+ years ago so everyone who knew that field well, is now retired or doing some other job. But hey, at least some execs got some fat bonuses and career changing promotions out of it.

sneak 3y ago

Right now, everyone at Apple and everyone in the USG knows that an all out trade war (or, heaven forbid, war war) between the US and China means that the head and body of the sometimes-largest US company get severed. It behooves Apple and everyone on Team USA to do everything possible to make Apple be able to survive a corporate beheading ifwhen they become unable to manufacture in China. They’ve started moving AirPods (India and Vietnam), some iPhones (India), and now iPads (Vietnam). Apple’s scale is immense, and a full replacement strategy is maybe the largest project they have ever undertaken, and certainly the largest that doesn’t get announced as some cool new product.

Morte42 3y ago
I doubt it has much to do with any impending war, after all Apple is moving to Vietnam with the assistance of a Chinese company that has been established in Vietnam for decades. China's relations with Vietnam go back millennia, they even provided Vietnam with weapons and training during the their wars against France and the US. If anything China is trying to establish itself in Vietnam before anybody else can. Vietnam, Bangladesh, Mexico and Brazil are all increasingly entwined with China when it comes to offshoring cheaper and simpler manufacturing. Expect the above nations to rapidly replace Made in China for many goods like batteries, toys, clothing and much more. In 2018 China's trade balance accounted for 0.66% of their GDP. In 2019 it was 0.93%. In 2022 it leapt to 3.21%. In the next couple of years it will likely return to around 2% meaning that the domestic Chinese economy is responsible for adding around 98% of the value to China's GDP every year, the sum of all of China's international trade balance adds 2%. Being the Worlds factory really isn't all its made out to be, China needs to reform itself to make profitable goods not cheap ones if it wants its international trade to be as lucrative as the rest of its economy. They had a plan for 2025 but covid happened so its hard to see how much they were able to offshore, I believe clothing manufacturing has been reduced dramatically in China and they are making fewer batteries but otherwise they are probably still in the cheap industry rut.
theGnuMe 3y ago
It could be cost, China might be more expensive than Vietnam. I would think cost may play a role.

hughw 3y ago

"Country risk" is a term used in the oil industry. Is it common elsewhere?

selectodude 3y ago
I imagine with the interesting geopolitical situation we all find ourselves in, if it wasn't before it sure as shit will be now.
oblio 3y ago
I imagine it's common for all strategic resources.

RCitronsBroker 3y ago

i feel like this is largely motivated by growing qualms over being highly dependent on China. They are not alone by far, but Apple truly is an extraordinary case of being enitrely at the mercy of china playing their role. COVID was the event that lowered the tide enough to, painfully so, expose whos swimming naked. Now, add growing concerns over IP protection plus political volatility, and you have a situation that makes shareholders and executives queasy when rethinking their current position. China also isnt as cheap as it used to be, has economic troubles and faces an impending population collapse. Thats one hell of an uncertain future, soon-to-be superpowers dont tend to suddenly stop providing key metrics regarding their population and economy. Lets see how they handle their own personal 2008, Evergrande aint lookin too good either.

yieldcrv 3y ago
Vietnam is a single party state capitalist system nominally called the Communist Party that teaches the same Marxist ideology as China. Vietnam's head of state and head of party can serve just as many terms as Xi Jinping has so far. Vietnam's system as all the same trappings as China's when it comes to political dissent or anything that can "undermine the territorial sovereignty and unity", an idea that can be used to control all facets of life. There are major human rights violations and concerns occurring there as well. The general lack of trepidation about Vietnam, from the West, is solely due to Vietnam's irrelevancy, and Vietnam playing their own irrelevancy as friendliness for their own protection, it makes sense and they have no reason to do otherwise. My only point here is that the primary issues we have with China is not their system, just their market power.
- FirmwareBurner 3y ago
  Your last two paragraphs are bang on the money. Manufacturing is moving to Vietnam because it is politically, economically and militarily weak enough that it can easily be bullied into compliance/submission by the US in case it ever decides to go rogue and threaten US investments, or have the audacity to spin it's own domestic champions to compete with US players. China was also like that 30 years ago but has now become strong and influential enough that it can not longer be bullied into just being the submissive sweatshop of the world it once was. I recommend you watch the video that aged like fine wine: 'Meet King Joe - 1949 - Cold War Era American Propaganda Cartoon': https://www.youtube.com/watch?v=j-6YQQ779YM https://www.youtube.com/watch?v=j-6YQQ779YM

userbinator 3y ago

Ironically, many sites for the repair of phones, laptops, and other consumer electronics --- including Apple products --- are hosted in Vietnam.

andrewstuart 3y ago

Companies all over the world have discovered that the cheap labor authoritarian nation where they did they manufacturing turned out in the end to be a real political problem and business risk, so they're moving their operations to countries that don't have such risks.

gonzaloalvarez 3y ago
that don’t have such risks… yet
- andrewstuart 3y ago
  What are you suggesting?
KRAKRISMOTT 3y ago
> Companies all over the world have discovered that the cheap labor authoritarian nation where they did they manufacturing turned out in the end to be a real political problem and business risk, so they're moving their operations to countries that don't have such risks. So they moved from one cheap labor authoritarian nation to the other cheap labor authoritarian nation next door.
drdaeman 3y ago
> so they're moving their operations to countries that don't have such risks Did you mean: different cheap labor authoritarian nation?
Manuel_D 3y ago
It's not the authoritarianism that's the issue with China. It's the geopolitical rivalry with the US and Taiwan.
- andrewstuart 3y ago
  >> geopolitical rivalry with the US and Taiwan. The other geopolitical rivalries play a role too, including with Japan, Australia, the Philippines, Malaysia, Vietnam, South Korea, Philippines, Brunei, India,