Sources: Meta is struggling to move hardware manufacturing out of China; after abandoning its smartwatch plans, the company is still working on a wrist wearable
Context & Ripple Effects
Meta's wrist-wearable program has been in limbo since it halted its $349 dual-camera smartwatch last June after two years of development, but sources say a slimmer wrist device is still in the works. The new complication is geographic: Meta wants its hardware manufacturing out of China and cannot find the key suppliers to do it.
That constraint matters because the company's broader hardware line faces the same wall — later reporting shows Meta moving half of MR headset production to Vietnam while simultaneously handing part of headset development to Chinese manufacturer Goertek, a split that keeps Chinese suppliers embedded in the chain even as assembly relocates.
First-order effects
- Meta's unreleased wrist wearable stays tethered to Chinese component suppliers for now, since no non-China source exists for the parts it needs.
- The company's supply-chain diversification goal slips from a near-term plan to an open-ended search, with the wearable timeline hostage to supplier discovery.
Second-order effects
- Chinese suppliers like Goertek retain leverage: even as Meta shifts final assembly to Vietnam, design and component work flowing back to Chinese manufacturers deepens rather than cuts the dependency.
- Rivals with entrenched China supply chains face less pressure to move, since Meta's struggle demonstrates the cost of being first out.
Third-order effects
- If the pattern holds, 'leaving China' for consumer hardware means relocating assembly while components stay Chinese-sourced — a partial decoupling that leaves the deepest layer of the supply chain intact.
- The eventual revival of the shelved smartwatch project as Malibu 2 suggests Meta treats wearables as a persistent product line, meaning the supplier problem must be solved rather than waited out.
The trend: Big Tech's exit from Chinese hardware manufacturing is proving partial by necessity: assembly can move to Vietnam, but component-supplier depth keeps China inside the bill of materials.