With no 'China burden' like on Apple, Google to stop making Pixel devices in the country

Google is shifting production of its Pixel smartphones, watches, and earbuds out of China, beginning next year, according to Nikkei Asia. This move is prompted by strained relations between Washington and Beijing. In an effort to reduce dependence on China, the company is ramping up production capacity in Vietnam and India. A source familiar with the matter says Google reached a 2027 goal to shift all Pixel production out of China after successful results in Vietnam this year.

Unlike Apple, Google has no Pixel presence in the Chinese market, so the burden to leave is greater for the latter. Sources say Vietnam's smartphone supply chain ecosystem, built by Samsung, is making the transition smoother. Google aims to increase Pixel shipments by 8-10% this year from around 12 million units last year, despite rising memory chip costs.

The company hopes its smartphones will be a key platform for consumers to access its Gemini AI applications. Google is also combining memory chip orders for its cloud-computing business with smartphone chip orders to gain better bargaining power. The tech giant is confident its Pixel phone base, while still small, has ample room to grow.

This strategic shift could potentially allow Google to capture market share from Apple in the U.S., Japan, and Europe, especially if Apple raises iPhone prices.