Apple's Vision Pro Sales Success Faces A Bigger Threat Than Consumer Demand

It looks like Apple's Vision Pro won't be an easy buy for deep-pocket XR headset enthusiasts in 2024. According to a report from the Financial Times, Apple has made "drastic cuts" to production estimates for its highly-anticipated headset, which is expected to hit the shelves early next year. Citing sources inside Apple and one of its supply chain partners Luxshare, the report says Apple could end up producing less than 400,000 units of its headset, which is priced at $3,499.

The complexity of the headset's engineering, and the subsequent production difficulties associated with the whole assembly process, have been cited as the key reasons behind Apple scaling down the production forecasts. Two other supply contractors cited in the report claim Apple has only asked them to provide enough material for assembling between 130,000 and 150,000 Vision Pro units in its first production year. 

Apple had initially targeted one million shipped units for its debut AR/VR headset, and maintained a minimum prep time of at least two quarters between launch and market arrival so that developers could ready their apps and the company could deal with the production challenges. However, Apple is reportedly not pleased with its suppliers due to the low yield of the micro-OLED display panels on the Vision Pro. 

The micro-OLED display units, which are touted to offer an industry-leading resolution of 4K per eye, are the most expensive part of the headset. Crucially, it delivers the kind of cinematic viewing experience that Apple demoed with great pride at WWDC 2023 earlier this year. Apparently, Sony, one of the suppliers of the aforesaid micro-OLED panels for the Vision Pro, wasn't too bullish on the growth of the high-end XR headsets, which is why it didn't accordingly ramp up its own production facilities. 

Moreover, analysts and Wall Street estimates about the Vision Pro shipment figures also vary drastically from a few thousand units to early millions, which could also have thrown supply chain partners in disarray. But it looks like the Vision Pro's complexity is having a cascade effect on Apple's long-term XR wearable plans. According to the report, the undesirable tweaks in Vision Pro production plans have also pushed back the plans for an affordable version of the headset. 

It was recently reported that Apple is already planning a more affordable trim of the Vision Pro, and has also started clearing the roadmap of a second-generation flagship Mixed Reality headset. However, there is no word if the latter plans have also been impacted. But do keep in mind that Apple was reportedly targeting a 2025 launch for its more affordable headset, so it is plausible that the company could iron out the supply kinks by that time and keep the project on track.