Apple forced to cut production plans for Vision Pro headset, report

Apple had projected sales of one million units for the first year, but the real number is now expected to be less that half of that figure

Difficulties in producing the intricate design have led Apple to lower its production targets for the highly anticipated mixed-reality Vision Pro headset.

The Financial Times reported on Monday, citing people with knowledge of the matter, that Luxshare, the sole contract manufacturer responsible for the initial assembly of the device, is expected to produce less than 400,000 units of the $3,499 Vision Pro device in 2024.

Additionally, two Chinese suppliers who are the sole suppliers of specific components for the Vision Pro told FT that Apple has requested enough components to manufacture only 130,000 to 150,000 units in the first year.

Both these figures fall significantly short of the internal sales target set for the first 12 months, which was aimed at achieving 1 million unit sales.

According to the FT report, the plans for a more affordable version of the device have been delayed.

The report says a major challenge in the production of Vision Pro headset lies in manufacturing the sleek screens, which consist of two micro-OLED displays (one for each eye) and an outward-facing, curved "lenticular" lens.

"The inward displays offer a resolution exceeding anything currently on the market, while the outward lens projects the headset wearer's eyes to the outside world," the report reads.

During the June demonstration of the device, Sony and chipmaker TSMC provided the micro-OLED displays for the prototypes. However, according to the report, Apple has expressed dissatisfaction with the suppliers' productivity.

The reduction in the 2024 production forecast has also caused disappointment for Luxshare, as the company had plans to expand its capacity and potentially manufacture nearly 18 million units annually in the coming years.

Apple revealed the new Vision Pro headset last month, after taking more than seven years to develop the device.

The headset, resembling a pair of ski goggles with a front display, has been hailed as the next major technological innovation after the iPhone. It is equipped with a specialised dual-core variant of Apple's M2 chipset, which works in tandem with a cutting-edge R1 chip. This combination handles input from 12 cameras, five sensors and six microphones.

Apple says it has collaborated closely with prominent companies such as Adobe and Microsoft to optimise their apps for the new headset.

The headset is anticipated to be released in the United States early next year. It has a starting price tag of $3,499, which is more than three times the cost of Meta's most expensive headset in their mixed and virtual reality device line-up.

During the unveiling, Apple made a deliberate effort to distinguish itself from competitors like Meta, Google, and Microsoft by categorising the product as a "spatial computing" device, rather than simply a virtual reality or augmented reality headset.

In the last month, analysts have presented different projections regarding Apple's expected sales of Vision Pro headsets in 2024.

Wedbush analysts estimated that around 150,000 units would be shipped in 2024, followed by approximately one million units the following year. Meanwhile, Bank of America analysts anticipated that Apple would ship 1.5 million units of the Vision Pro in its first full year on the market, while Apple's internal estimates had initially projected sales of 1 million units for the first year.