Apple Inc. is slashing production targets for its Vision Pro headset because manufacturers are struggling with the novel gadget’s complex design, the Financial Times reported.
Apple is now preparing to make fewer than 400,000 units of the US$3,499 headset in 2024, the Times said, citing unidentified people close to Apple and Luxshare Precision Industry Co., the Chinese firm that’s initially assembling the device. Two China-based suppliers of components said Apple was only asking for enough parts for 130,000 to 150,000 units in the first year, while plans for a cheaper version have been pushed back, the newspaper reported.
Luxshare stock pared earlier gains but was still up about 3.8 per cent on July 3 in Shenzhen. Apple was down about 0.9 per cent at US$192.24 at 11:46 a.m. EDT in New York.
The news “isn’t surprising to us, as it’s a first-generation product,” Bloomberg Intelligence analysts Anurag Rana and Andrew Girard said in a note. “Our original thesis called for only 500,000 units in the first year (half Apple’s original expectation) given the headset’s $3,500 price tag. We don’t expect the product to have significant financial impact for the next three years.”
Apple recently made Wall Street history after its market value climbed past US$3 trillion, as investors continued to pile into big tech firms.
The Vision Pro, unveiled last month, is the company’s latest move to sustain sales momentum and try to propel a mixed-reality industry that for years has struggled to make it into the mainstream. The device, which resembles high-tech ski goggles, will have its own operating system, visionOS, and a dedicated App Store. It’s slated to arrive early next year in the U.S., followed by other regions later.
Apple unveils mixed-reality headset setting up showdown with Meta
Apple Vision Pro headset could pave way for mass adoption of AR, VR
Apple hits historic $3 trillion market cap
But the new projections are down sharply from a previous internal sales target of 1 million units in the first 12 months, according to the Financial Times.
A major hurdle is the creation of high-resolution inward displays, while projecting the wearer’s eyes to the outside world, the paper said. Apple is also working on a more affordable version of the headset with Korean display makers, the paper said, citing two people with direct knowledge.
Apple and Luxshare didn’t respond to requests for comment.
— with assistance from Debby Wu, Edwin Chan and Natalie Lung