Apple to Make Drastic Cuts to Vision Pro Headset

Apple is facing significant challenges with its Vision Pro augmented-reality headset, leading to a substantial reduction in its production plans.

The insiders familiar with the matter explained that the intricate design complexities are to blame for this setback. The Financial Times reported on Monday that Apple had to revise its forecasts due to these issues.

The Vision Pro, which was introduced to the market just last month, was anticipated to hit the shelves in the United States at the beginning of next year. However, the latest development has raised concerns about the timely availability of the product.

Moreover, potential buyers should be aware that the starting price for the Vision Pro stands at $3,499, making it considerably more expensive than Meta’s most high-end mixed and virtual reality headsets, which are priced at a third of Apple’s offering.

Only 400,000 Vision Pro Headsets to be produced in 2024

The report says that Luxshare, the Chinese company responsible for manufacturing Apple’s Vision Pro, is expected to produce fewer than 400,000 units of the device in 2024.

This falls short of Apple’s initial sales goal of 1 million units within the first year, as stated by Financial Times.

Apple sharply cuts Vision Pro headset production estimates, less than half of previous target bulls still confident in margins …… Will $AAPL stand a chance at a $3 trillion market cap this time? pic.twitter.com/vl2IDZIkOl

— Jenny machange (@JMachange) July 3, 2023

Moreover, when approached for comments, both Apple and Luxshare did not respond to requests from Reuters.

Susannah Streeter, who holds the position of Head of Money and Markets at Hargreaves Lansdown, expressed concerns about Apple’s Vision Pro headset. She stated that the device was already facing difficulties due to its steep price tag, and now it has encountered another potential obstacle.

Streeter also mentioned that Apple faced challenges after the product’s post-launch period but managed to recover remarkably when users provided feedback through testing.

Moreover, the Financial Times reported that Apple has reached out to two suppliers based in China to secure components for approximately 130,000 to 150,000 units within the first year.

$AAPL Apple hits production hurdles with Vision Pro headset 🥽 (Financial Times)

Complex design is forcing a cut in forecasts:

📉 From 1M units to just 400K in 2024.
🗓️ More affordable model delayed.

Analysts expect a 20M+ user base in 5 years. pic.twitter.com/pmanZChxQm

— App Economy Insights (@EconomyApp) July 3, 2023

Additionally, the report stated that plans for a more affordable version of the device have been delayed.

Apple is ‘unhappy’ with the production of micro-OLEDs

One significant challenge in the production of the Vision Pro headset revolves around the manufacturing of micro-OLED displays.

The report indicates that Apple is dissatisfied with the yield of defect-free micro-OLEDs, which adds to the complexity of the production process.

The Financial Times also reported that the reduction in production forecasts has left Luxshare disappointed. The company had plans to expand its capacity in order to manufacture nearly 18 million units of the headset each year in the future.