Apple has made “drastic cuts” to Vision Pro headset production plans, according to manufacturing-side sources talking to the Financial Times. Indications are that the scaling back of orders for the headset have not been spurred by the significant cost of the device, and thus user adoption concerns. Instead, the FT sources say that “the complexity of the headset design and difficulties in production,” have impacted hardware production targets.
Plans to release Vision Pro headsets to the public “early next year” were revealed at WWDC about a month ago. Tom’s Hardware had eyes on the show and our op-ed sparked a lot of discussion among readers, mostly about Apple’s chance of becoming a success in the AR / VR / XR segment, and its $3,499 product pricing.
Apple usually follows up product announcements quick-sharp with product availability, but the Vision Pro was different. After WWDC we were left wondering whether there was a lot of work left to do – and whether manufacturing and / or software development were holding back launch plans.
On the topic of pinch points affecting launch plans, the FT report points a finger pretty squarely at manufacturing. According to our reading of the report, which collects the views of a number of manufacturing insiders and external analysts, a major sticking point is likely centered on the production of the MVision Pro’s micro-OLED displays – which are said to be manufactured by Sony and TSMC. This cutting edge tech component, and several more, are so new that it is thought their production processes are prone to very bad yields.
Much of the information unearthed in the FT report appears to come from Luxshare, though some is also said to come from Apple sources. Luxshare is a Chinese IT products contract manufacturer which was formed from the Shanghai-based AR development team previously owned by Taiwan’s Pegtatron.
Apple Vision Pro sales targets for 2024 were originally set for a nice round one million units. However, according to FT’s sources at Apple and Luxshare, the Cupertino firm is now looking at a more modest 400,000 units shipped in 2024. More worrisome are numbers from secondary suppliers (supplying Vision Pro components) who have apparently been given much smaller orders: only enough to manufacture between 130,000 to 150,000 units in the first year.
Analysts are even more diverse in their predictions for year one Apple Vision Pro headset sales. The FT sites various analyst firms predicting anything between 150k to 5m Vision Pro unit sales in year one. Probably the most detailed predictions come from IT-centric analyst firm Canalys. The FT says Canalys forecasts 350,000 headsets sold in 2024, rising to 12.6 million after five years. Moreover, Canalys expects an Apple Vision Pro user base of 20 million within five years of launch.
Obviously production is going to have to scale up a lot in the coming years for Canalys estimates to play out. Luxshare has apparently been investing and building plant which could churn out nearly 18m units p.a. in the future, reports the FT. Additionally, some of the early teething troubles we are seeing might be remedied by the arrival of Apple’s more affordable 2nd gen headset. The upcoming generation HMD from Apple will, for example, use displays manufactured by Samsung / LG, according to reports. These Korean display makers are already trusted suppliers for lots of other popular Apple devices. When Samsung and LG are ready with Apple headset spec displays we may well see the end of current production issues and Luxshare’s production facilities fully unleashed.
