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Web giants Facebook and Google are stepping up their deployments of hardware production in Asia, especially in China, with the former planning to set up an office in Shanghai in 2018 to house a hardware team and the latter to build a smartphone production plant in eastern China, generating new business opportunities for supply chain partners, according to industry sources.
Facebook’s planned Shanghai office will be used by its new hardware team, called Building 8 and founded in 2016. The team will be expanded from the existing 200 members to 500, and Facebook is reportedly investing heavily in poaching well-experienced supply chain management talent from Apple.
The Shanghai office will handle everything related to coordination with China producers and assemblers for smart medical devices, drones, and other AI devices, letting the social networking platform work better with local companies, the sources said.
In fact, the Building 8 team is developing a smart speaker with a 15-inch touchscreen to compete with Amazon’s Echo, Google Home and Apple’s HomePod, and the new device is slated to be released in early 2018, the sources noted.
Meanwhile, after acquiring the smartphone R&D team and IP license rights from Taiwan’s HTC for US$1.1 billion in September 2017, Google is actively seeking to set up a smartphone manufacturing plant in Taizhou of Jiangsu province, China. The company has conducted intensive negotiations with target supply chain partners, supply chain sources said.
Industry watchers said the ongoing hardware production expansions among web service giants were partly triggered by Apple’s success in exploiting the synergies of hardware and software integration to the extremes, and partly by the rollout of Amazon Kindle, a series of e-readers designed to render online-to-offline services to consumers by allowing them to browse, buy, download and read e-books, newspapers, magazines, and other digital media via wireless networking to the Kindle Store.
They said the moves of Facebook and Google to expand their hardware presence in Asia mean new business opportunities for supply chain players, but it will also bring new competitions to brand vendors of IT products.
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