Wearable device maker Fitbit said it will manufacture all its trackers and smart watches outside China from January as the U.S. company is looking to insulate itself from tariffs.
The company said it began exploring alternatives to China in 2018 as Washington and Beijing engaged in a tit-for-tat tariff war that has upended global supply lines and roiled financial markets.
North America’s wearable band market revenue reached $2 billion in the second quarter of 2019, with shipments growing at 38 percent at 7.7 million units — driven by smartwatch sales.
More than 60 percent of Apple’s 4.7 million global Watch shipments were into North America. Fitbit was the second player, with shipments up 18 percent thanks to it pushing more basic bands into the channel, according to research report from Canalys.
Fitbit in June joined a group of U.S. companies in filing letters of opposition to President Donald Trump’s plan for more U.S. tariffs on Chinese goods.
The tariffs would result in a competitive advantage for Chinese device makers in the U.S. market, the company had said.
Fitbit’s smart watches, along with Apple’s AirPods, Apple Watch and HomePod, smart speakers from Amazon.com and Alphabet’s Google, failed to win a reprieve from the 10 percent U.S. tariff that started from Sept. 1.
Fitbit did not reveal the new manufacturing location. Fitbit said it will provide more details of the impact of the move during its upcoming third-quarter conference call.
Several U.S. companies are shifting — or looking to shift — their manufacturing facilities from China.
Action camera maker GoPro is relocating a bulk of its U.S.-bound camera production to Mexico.
Google has moved production of its Nest thermostats and server hardware out of China, Bloomberg reported earlier this year.
Fitbit has been in talks with an investment bank about the possibility of exploring a sale, Reuters reported last month.