Google will stop making pixels in China
Google intends to cease production of its Pixel smartphones, smartwatches, and wireless earbuds in China starting next year, as ongoing US-China tensions compel technology firms to diversify their supply chains, according to reports. The company has been expanding its manufacturing capacity in Vietnam and India in recent years to mitigate its reliance on China. While a significant portion of its production remains in China, Google now seems assured that it can relocate all Pixel manufacturing outside the country by 2027, a source indicated. Google’s decision is a direct result of the successful development and production of its high-end Pixel smartphones in Vietnam this year. Producing advanced smartphones entails greater complexity compared to the manufacturing of smartwatches and wireless earbuds. The advancements observed in Vietnam have reinforced Google’s commitment to its 2027 target, according to the report. If the plan proceeds, Google would emerge as the second prominent global smartphone brand, following Samsung, to entirely relocate smartphone production from China.
The report cited a source indicating that Google has no obligation to exit China, as it does not market Pixel phones in that region. The source had previously reported that Google was relocating the development of new high-end Pixel models from China to Vietnam. Google is also aiming to boost Pixel sales in the face of a significant increase in memory chip prices. The company has informed suppliers that it anticipates an increase in Pixel shipments by 8-10 percent this year, up from approximately 12 million units in the previous year, according to the report. Google views its smartphones as a crucial avenue for attracting a larger user base to its Gemini artificial intelligence services. This is one reason the company is striving to sustain growth in Pixel shipments, even in the face of rising component costs. Google is actively seeking to enhance its leverage in discussions with memory chip suppliers.
It has consolidated orders for chips utilised in its cloud-computing sector alongside smartphone orders during negotiations with Micron, Samsung, and SK Hynix, according to the report. The report cited an executive from a component supplier to Google and Xiaomi, indicating that Google was one of the few smartphone manufacturers that had not lowered its shipment target for the year. The executive noted that Google may capture market share from Apple in the United States, Japan, and Europe should Apple decide to increase iPhone prices. Last week, Google introduced the Pixel 11, Pixel 11 Pro, and Pixel 11 Pro Fold. The new models commence at $899 for the 256GB variants, in contrast to the previous-generation Pixel 10, which was priced at $799 for its 128GB storage option at the entry level.
Google is not the sole smartphone manufacturer endeavouring to sustain shipment growth in the face of escalating memory chip expenses. Apple and Huawei are also seeking to boost their shipments, as reported by sources earlier. In contrast, Xiaomi, Oppo, and Vivo have revised their shipment forecasts downward multiple times this year, as escalating prices for memory and other components exert pressure on manufacturers. Apple Chief Executive Tim Cook has indicated that the company anticipates an increase in memory chip costs throughout its product range this quarter. The company has already raised prices for certain existing MacBook and iPad models, in addition to iPhones sold in Japan.
