Fitbit Shifts Production Away from China
by Anton Shilov on October 10, 2019 2:30 PM EST- Posted in
- Smartwatch
- Fitbit
Fitbit has announced plans to shift its production away from China starting early 2020. The company indicated that the decision was conditioned by the fact that its products were subject to Section 301 tariffs as a consequence of the ongoing trade war between the US and China.
Fitbit has been evaluating options how to move production of all of its fitness trackers and smartwatches away from China from 2018. As a result of its efforts, all of its devices will be produced in other countries and therefore will not be subject to Section 301 tariffs.
The company did not say where it will make its trackers and watches going forward, but promised to reveal more details in its upcoming Q3 earnings conference call.
Fitbit, which sells fitness trackers and smartwatches worth around $300 million per quarter, is not the first company to move its production away from China and is rather a part of the trend. Last week Samsung ceased to make smartphones in Tianxia and before that such giants as Apple and ASUS revealed intentions to lower purchase of components from Chinese suppliers. By contrast, companies like Intel and LG Display are actually ramping up manufacturing of OLED panels and 3D NAND memory in China due to comfortable business conditions and rising local demand.
Here is what Ron Kisling, CFO of Fitbit, had to say:
“In 2018, in response to the ongoing threat of tariffs, we began exploring potential alternatives to China. As a result of these explorations, we have made changes to our supply chain and manufacturing operations and have additional changes underway. Based on these changes, we expect that effectively all trackers and smartwatches starting in January 2020 will not be of Chinese origin.”
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Source: Fitbit
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JoeyJoJo123 - Thursday, October 10, 2019 - link
In other news, Blizzard shifts game content values towards China.willis936 - Thursday, October 10, 2019 - link
And Apple shifts software distribution values towards China.And NBA shifts player speech values towards China.
Alexvrb - Thursday, October 10, 2019 - link
Disney is even worse. But yeah the entire entertainment industry has been bending over backwards to match Chinese values, even while trying to cater to SJWs stateside. Pretty hilarious to watch the inevitable collision. The recent South Park episode was an instant classic too... even if it did get them completely wiped from existence in China.s.yu - Friday, October 11, 2019 - link
I don't think China ever approved South Park for domestic release. The censorship there, for the recent 2 decades, hardly allows satire of any kind much less something that blunt.Whoever watched South Park in China has always done so through illegal downloads, and counterfeit DVD initially.
SigmundEXactos - Thursday, October 10, 2019 - link
Of course, manufacturing is not coming to the US but other SE Asian countries like Vietnam.sorten - Thursday, October 10, 2019 - link
True. Manufacturing won't move back to North America until it is almost completely automated.PeachNCream - Thursday, October 10, 2019 - link
US labor is far too expensive. Shareholders and private owners seek to maximize profits so the US is simply not a good location in which to engage in most production activities while it remains less costly to produce and transport from elsewhere.1prophet - Friday, October 11, 2019 - link
Of course US labor is expensive along with all the rules and regulations that go with it, how about we lower our standards and minimum wages to the same levels as these countries that don't care about their human rights, labor rights, environmental laws, etc. and have the tax payer funded government subsidies American businesses like China does, so we can have our cheap stuff made here, don't think that will go over to well with the virtue signaling self entitled public though,And these same outsource loving companies that would sell their own mothers for profit want the tax payer funded American government to protect their corporate rights and profits including sending young men and women to war for them to protect their interests, while expecting the American consumer to work two or more jobs in the gig economy to buy their products.
Maybe they should just outsource their corporate charters to these foreign countries they love so much and have them protect their corporate rights and profits while trying to sell to the locals at the same prices as if they are selling to the American consumer that has been brainwashed to think only about the price they pay now not at the political, human rights and environmental costs that are much greater which are coming home to roost now.
PeachNCream - Friday, October 11, 2019 - link
Yes, okay.Tewt - Monday, October 14, 2019 - link
Couldn't agree more. We are unable to compete with other countries all the while promoting things like "fight for $15", paying carbon credits, adding more useless bits on the auto industry while ignoring diminishing returns started three decades ago, and any number of nickel and dime government schemes that increases the cost for everyday Americans yet price their labor out of the market, opening the door for illegal immigration and increased H1B visas.Yes, decrease regulation and let the market decide what a person is paid so we can compete globally.