Apple has reportedly slashed its production targets for the Vision Pro headset from 1 million units in the first year to just 400,000.
This headset was all anyone could talk about after the WWDC, but it seems as if the company has bitten off more than it can chew. The production cuts, just three weeks after the announcement are a major sign that the company is facing challenges in bringing it to market.
Two people close to Apple and Luxshare, the Chinese contract manufacturer that will initially assemble the device, said it was preparing to make fewer than 400,000 units in 2024.FT
Earlier today, Financial Times reported on this, pinpointing the factors that may have convinced Apple to consider this decision, but there has been nothing said as far as official channels are concerned. If we look closely, there are a number of factors that could be contributing to the production cuts.
First off, obviously the headset is a complex device, and Apple’s most ambitious product in years.
We know how it features a lot of new tech, including those high-res micro-OLED displays, and a rather complicated chipset design, putting together the R1 together with the M2. And so, manufacturing such a device is no easy task, and it’s likely that Apple is facing delays in getting it up to speed.
Another factor that could be contributing to the production cuts is the price of the headset. The Vision Pro is priced at $3,500, which is significantly more expensive than other headsets on the market.
From people’s views on the internet, we know how this price tag is deterring some consumers from buying the device, and it could also be making it difficult for Apple to secure enough components to meet its initial production targets.
Despite the production cuts, Apple is still confident in the Vision Pro. The company believes that the headset has the potential to be a major hit, and it is reportedly planning to release a more affordable version in the future.
Could Apple’s Decision Indicate Supply Constraints?
Well, regarding this move from Apple, a lot of analysts have a mixed point of view regarding the implications of this decision. Some believe that the move clearly shows how the headset is not as popular as Apple had hoped, and that the company should reevaluate its pricing, while others believe that it is simply a matter of supply constraints.
Even if Apple starts off with 400,000 in 2023-24, analysts project it to reach ~20 million by 2028.
As for now, it’s not surprising that Apple has slashed its production targets for the Vision Pro headset. The $3,500 price tag is a hefty one, and it’s likely that only the most die-hard Apple fans will be willing to pay that much for it. However, I think that once Apple releases a more affordable version of the headset, priced around the same as an iPhone, it will sell much more easily.
This is all we know at them moment, but rest assured that we will keep you updated as new information becomes available.