Apple puts resources into developing new iPad models in Vietnam

On December 8, Nikkei Asia newspaper quoted a well-informed source as saying that Apple has allocated resources for the first time to develop iPad products in Vietnam.

Accordingly, Apple is working with BYD (China) - a major manufacturer of iPad products - to transfer resources for new product development (NPI) to Vietnam.

The NPI process is a collaboration between a technology company (like Apple) and several product design and development suppliers to ensure the design of a new product is viable.

NPI requires significant resources from both the technology company and its suppliers, such as engineering teams and lab investments for testing new product features and functions.

According to Nikkei, this is the first time Apple has transferred NPI resources for a core product like the iPad to Vietnam.

The source said that the technical verification process for trial production of the new iPad model will begin in mid-February 2024. The iPad model will be available on the market in the second half of 2024.

Previously in 2022, BYD was also the party that helped Apple move the iPad assembly line to Vietnam for the first time.

Most of Apple's NPI process is done in China, with engineers in Cupertino, California (Apple's headquarters) taking advantage of the country's decades of hardware manufacturing expertise.

However, recent geopolitical tensions have forced Apple to reconsider its approach and redirect some of its iPhone NPI processes to other countries like India.

Data from IDC shows that Apple is the world's largest tablet maker, with a market share of 36.6% in the first three quarters of 2023. According to Counterpoint Research, only about 10% of Apple's total iPads were made in Vietnam this year, with production still largely in China.

However, according to Nikkei newspaper, Vietnam has emerged as Apple's most important technology outsourcing center outside of China.

The company has asked multiple suppliers to build new manufacturing capacity in Vietnam for nearly every product, from AirPods and MacBooks to Apple Watches and iPads — except the iPhone.

Industry experts say Apple's placement of NPI resources in several countries outside of China means these regions will soon become alternative manufacturing hubs.

“Vietnam has always had an important and strategic role in manufacturing, serving as a manufacturing hub and has the potential to become one of the next global manufacturing hubs,” said Ivan Lam, a technology analyst at Counterpoint Research.

"Apple's recent supply chain map has shown the capabilities of its facilities in Vietnam to produce iPads and scale up production," said Mr. Lam.

"With the current manufacturing conditions and the reduced difficulty of producing iPads, including modularization and NPI in the domestic context of Vietnam, it is only a matter of time before this can become a reality. However, Vietnam will initially prioritize manufacturing products that are not in the high-end segment," Mr. Lam added.

Bryan Ma, vice president of IDC's client devices research, said Vietnam is one of the countries benefiting from the technology equipment industry's efforts to diversify its supply chain, not only with tablets but also personal computers.

“It's important for the whole ecosystem to move with the assemblers, especially for laptops, which have more separate parts,” Ma said.