According to the latest rumours, originating from the XBox camp, Microsoft is seriously considering moving its production to China. As part of Microsoft's war on price for the next generation of the XBox, Flextronics of Singapore, producer of the console for Microsoft, is to transfer manufacturing from its site in cheap Hungary to super-cheap mainland China.
Todd Holmdahl, Microsoft general manager of Xbox hardware said Flextronics will be able to manufacture Xbox consoles under ideal production circumstances. It is a large facility, with a strong infrastructure and flexible production capacity that will result in significant cost efficiencies.
According to the same rumours the facility in China, situated at Doumen, could in time replace the manufacturing facilities in Mexico, responsible for the supply of North America.
The clearly excited Flextronics chairman, Michael Marks said through the local supply base and our substantial buying power we can help Microsoft reduce product costs and assist in meeting the growing worldwide demand for Xbox.
It all comes down to labour costs and if Microsoft and its manufacturing partner seem that excited about China, they must have good reason to be.
