Alphabet's potential shift of Pixel smartphone production from Vietnam to India aims to sidestep US tariffs.
Alphabet Inc., the parents of Google, is considering moving part of its Pixel smartphone production from Vietnam to India to minimize risks associated with global sourcing, according to industry sources. The US recently threatened to impose higher tariffs on imports from Vietnam, where most Pixel smartphones are produced. Compared to the US's 46% tariff on goods from Vietnam, India would only incur a 26% rate. Although the US postponed the reciprocal tariffs for 90 days from April 9, a 10% base tariff remains. Meanwhile, China continues to face the highest rate at 145%.
Amidst this situation, Alphabet is reportedly accelerating its plan to make India a significant global hub for Pixel production, a strategy initially intended to be implemented over the next two to three years. To prepare for the shift, Alphabet has shared plans with contract manufacturers Dixon Technologies and Foxconn, advocating for local production of phone parts, such as enclosures, chargers, fingerprint sensors, and batteries, which are currently imported, even for Pixel phones manufactured in India.
Currently, Dixon Technologies and Foxconn produce around 43,000 to 45,000 Pixel smartphones each month in India for local sale. Dixon handles around 65-70% of the production in India, including the newest models, while Foxconn focuses on older versions. Foxconn started manufacturing Pixels in Tamil Nadu in August 2023, and Dixon followed in December through a tie-up with Taiwan's Compal Electronics.
With the relocation of production to India, Alphabet aims to cut potential financial losses due to tariffs and seize the growing Indian market opportunity. The company's decision to move part of its production to India is also in line with India's initiative to offer various incentives to attract foreign investment in manufacturing.
While Pixel accounts for a small percentage of India's smartphone market due to its higher pricing, it has recently seen an improvement in its presence through the push into offline stores. Conversely, Pixel's market share in the US has expanded, reaching nearly 14%, after its latest release, up from around 7% at the end of last year, according to Statcounter.
Also read: Google teases AI glasses with real-time vision and memory powered by Gemini
Follow Us: Ayushi Jain, Tech news writer by day, BGMI player by night, combines her passion for tech and gaming to bring you the latest in both worlds. For more tech updates, follow Ayushi on Twitter
The smartphone industry, with Alphabet Inc. leading the way, is leveraging technology to escalate India's role as a significant global production hub for smartphones, especially Pixel devices, in response to potential financial losses due to tariffs and the growing Indian market opportunity. This shift in Pixel smartphone production from Vietnam to India also aligns with India's initiative to encourage foreign investment in manufacturing through various incentives.
