Apple’s AR Headset Manufacturing Cost Would Likely Exceed $1,500 Per Unit

As June 5th approaches (WWDC ’23), rumors and reports surrounding Apple‘s mixed-reality headset have emerged, and thanks to those, we now have news regarding the manufacturing costs for the device.

According to various sources from China, the Apple AR headset could cost the company around $1,500 to manufacture per unit. These reports have talked about the expensive components and production processes that lead to this hefty price tag.

A detailed report from Minsheng Electronics has provided us with some idea about the individual costs of the components.

The total cost of these components amounts to approximately $1,400, with an estimated BOM of around $1,600, including shipping. The most expensive components within the headset are the microOLED displays, priced at $280 to $320.

In addition to this, the 14 camera modules add a combined cost of $160, while the two chips (main M-series SoC and dedicated image signal processor) are believed to contribute $120 to $140 to the overall expense. The assembly process is expected to cost around $110 to $120.

For comparison, XR expert Brad Lynch compared the Apple AR headset’s BOM to that of the Meta Quest Pro headset and noted that it is roughly double the cost. Considering packaging, shipping, and marketing expenses, it is likely that the headset’s total cost falls below its rumored retail price of $3,000.

Wellsenn XR‘s report suggests that the total cost of the headset could reach $1,509, while a separate Chinese report, citing two other Asian analysis firms, estimates the BOM at approximately $1,290 or $1,300, excluding shipping. These reports also indicate that mass production is slated to begin in the third quarter of 2023, potentially coinciding with the headset’s launch.

Mark Gurman has revealed that Apple had initially planned to sell the headset at a loss but later decided to price it approximately at its manufacturing cost. The decision aligns with Apple’s strategy to capture the high-end market with this technology. The reported $1 billion annual development cost further emphasizes how important Apple perceives this launch to be.

While the estimated manufacturing cost of the Apple AR headset is undoubtedly high, it is crucial to remember that this figure only represents the production expenses. The final retail price will likely include additional costs such as packaging, shipping, marketing, and a reasonable profit margin for Apple.

With all this in mind, consumers can expect the retail price to exceed the manufacturing cost significantly, potentially reaching the rumored $3,000 mark.

It is important to note that the actual retail price remains unknown, but it is clear that the headset’s price will surely match what value it provides to the end-user. As Apple prepares to enter the mixed-reality market, fans eagerly await the official release and the opportunity to experience this technology.

This is all we know for now but rest assured that we will keep you updated as new information becomes available.