According to our colleagues at Nikkei, Google wants to expand its importance in the hardware segment and opts for expansion outside China. The US giant has set its sights on old Nokia facilities in Vietnam, to produce its Pixel smartphones. The opportunity for Google to enjoy a workforce already qualified and cheaper than that available in China. As Nikkei’s journalist points out, Google is driven on the one hand by the rising cost of Chinese labor and on the other by the economic war between China and the United States.
More expensive labor and higher taxes
In its home country, Google has managed to settle in 5th position in the smartphone market, especially with its more affordable Pixel 3a and 3a XL. The impact of Donald Trump’s administration’s decisions to tax 25% of imports from China would have an undesirable effect on the Mountain View firm. The increase in the selling price of Google’s smartphones would have a definite impact on the number of sales. The US company wants to increase power in the smartphone market. And can not afford such a disappointment during a period of growth. In 2018, IDC reports that 4.7 million Pixel smartphones have been sold. A figure reached by Google almost in the first 6 months of 2019, with 4.1 million terminals sold.
Smartphones are not the only ones to change air. Nikkei reports that Google Home assistants will also leave China for production lines in Thailand. However, our colleagues assure that the development of new products and the beginnings of their production will always be in China for the moment. In its quest for growth, Google is well aware that it can not completely leave the gigantic Chinese market. Despite the difficulties currently faced in the country. Anxious not to put all its eggs in one basket. The company plans to expand its production in Southeast Asia, especially in Vietnam and Thailand.