Microsoft plans to reduce its manufacturing operations in China and focus its phone production in Vietnam in what is considered a large restructuring of its Nokia unit.
“We plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices,” Elop explained in his email.
“We expect to make this shift immediately while continuing to sell and support existing Nokia X products.”
Lower cost
Vietnam is already home to the manufacturing plants of many tech giants, who also arrived in the country after scaling back operations in China.
The world’s leading smartphone maker Samsung Electronics Co Ltd is running four projects in Vietnam, while Intel and LG also have operations in the country.
Larry Dignan, editor in chief of ZDNet, a tech news and analysis website, said the fact that many major tech companies are exiting China is understandable, and it is labor wages that matter.
“A factory worker in Hanoi makes $145 a month compared to $466 in Beijing,” Dignan said in a post on ZDNet on Thursday, citing the Japan External Trade Organization.
Electricity and water costs are also lower in Hanoi, while Vietnam is “aggressively courting technology companies and plans to have 30 percent of its industrial product deriving from high-tech,” he wrote.
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