Topline
Apple’s Vision Pro augmented reality headsets—which are set to launch early next year—are facing manufacturing complications that have forced the company to severely slash production forecasts for the $3,500 product, according to a Financial Times report, dealing a blow to the rollout plans for the tech giant’s most ambitious product in years.
Apple’s new Vision Pro virtual reality headset is displayed during Apple’s Worldwide Developers … [+]
Key Facts
The “complexity” of the Vision Pro’s design and “difficulties in production” has prompted Apple to drop its 2024 production target for the device to less than 400,000 units, the Financial Times reported, citing unnamed sources close to the iPhone-maker and Luxshare, the Chinese manufacturer tasked with assembling the headset.
Two other Chinese suppliers cited in the report say Apple has only placed orders for enough components to produce between 130,000 to 150,000 units of the Vision Pro in 2024, two other Chinese.
A key issue with the production of the device reportedly stems from the complexity of its design, especially its use of high-resolution micro-OLED displays for each eye—whose production has been marred by low yields.
The disruptions have also caused Apple to delay plans for a cheaper version of the $3,500 augmented reality headset, the report added.
News Peg
Following its announcement last month, analysts offered varied projections on how many Vision Pro headsets Apple plans on selling in 2024. Analysts from investment firm Wedbush estimated that Apple will ship around 150,000 units of the headset in 2024, followed by a million the next year. Bank of America analysts were more bullish and expected Apple to move 1.5 million units of the Vision Pro in its first full year on the market. Apple’s internal estimates had initially pegged sales estimates at 1 million for the first year. In comparison, Apple’s first iPhone sold 1.7 million units in 2007 after launching in late June of that year. The first iPhone was priced at $499 at launch, but tied users to a two-year contract with AT&T.
Key Background
In its biggest new product announcement in nearly a decade, Apple unveiled the Vision Pro at its Worldwide Developers Conference last month. The device, which looks like a pair of ski-goggles with a display in front, has been touted as Apple’s most important product launch since the original iPhone. During its announcement, Apple appeared to make a discerning effort to separate itself from rivals like Meta, Google and Microsoft by describing the product as a “spatial computing” device instead of a virtual reality or augmented reality headset. Priced at $3,500, the Vision Pro is significantly more expensive than competing products from rivals, including the $999 Meta Quest Pro (which launched at $1,500) and the $599 Sony PlayStation VR 2.
Big Number
20 million. That it the total number of VR headsets that market leader Meta has sold as of March this year. Meta’s sales number reflects the relatively small size of the VR market as the company launched its first headset, the Oculus Rift, back in 2016.
Further Reading
Apple forced to make major cuts to Vision Pro headset production plans (Financial Times)
Apple Unveils Vision Pro AR/VR Headset, Its First Major New Product In Nearly A Decade (Forbes)
Apple’s Vision Pro Headset Is Tech’s Latest Bid To Crack AR/VR Devices—Here’s How Rival Products Have Performed (Forbes)
Source: https://www.forbes.com/sites/siladityaray/2023/07/03/apple-will-reportedly-make-fewer-than-400000-vision-pro-headsets-next-year-due-to-production-snags/