Apple slashes Vision Pro headset production due to design issues

Apple reduced its production goals for its Vision Pro headset because manufacturers are struggling with its complex design. The company would release a million units in 2024, but Fortune says it will only deliver 400,000 instead. Yet, its Chinese manufacturer said the tech firm only requested components for roughly 130,000 to 150,000 units.

The Apple Vision Pro turned heads as the “world’s first spatial computer” and shocked them with its jaw-dropping $3,499 price tag. However, this futuristic device seems susceptible to traditional market forces like production issues.

Understanding this issue lets you glimpse the challenges tech companies face when launching new products. This article will discuss why the Cupertino tech giant will cut its initial Apple Vision Pro production target. Then, I will cover opinions from other tech experts.

What are the problems with Apple Vision Pro manufacturing?

Apple has made major cuts to the production forecasts for its augmented-reality Vision Pro headset. Design complexities and major difficulties in the production process are being given as the reason, reported the Financial Times https://t.co/xOw5fPSiPw pic.twitter.com/BhS2XPzR8l

— Reuters (@Reuters) July 3, 2023

The Apple Vision Pro is a breathtaking device that allows people to use virtual and mixed reality daily. Unfortunately, fewer people may enjoy it next year due to production issues.

One of the biggest hurdles is the device’s multiple cameras. It has outward-facing, curved lenses that detect incoming people and let you see them through VR projections.

Also, its inward display resolution exceeds anything on the market. However, Fortune says two people close to Apple and Luxshare, the Vision Pro manufacturer, said the California tech firm only requested 130,000 to 150,000 units.

The complex product design makes it difficult for the Chinese company to mass-produce the Apple Vision Pro. Meanwhile, Fortune reported Apple was working with Korean display makers to create a more affordable version.

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Yahoo Finance said the iPhone maker explored using other display technologies like mini-LED. However, two China-based suppliers allegedly said Apple insisted on using it even for the lower-cost variant.

Another problem with Apple Vision Pro production is the quality. Yahoo said the AirPods maker’s suppliers couldn’t produce defect-free units. Also, the production cut “disappointed” Luxshare because it expected to build 18 million units annually.

On June 30, 2023, Apple shares fell by 0.3% after becoming the first to end a trading session above $3 trillion in market value. At the time of writing, Apple and Luxshare have not shared further information about Vision Pro production.

How did other tech experts respond to the production cut?

Photo Credit: apple.com

Ars Technica reported other expert responses to the Apple Vision Pro issue. For example, Eddie Han, an analyst at Taiwan-based Isaiah Research, said the headset disappointed the Asian supply chain.

“Apple has not made a better product than the industry imagined… the manufacturers’ confidence is not high,” he said. Conversely, others like Jay Goldberg, founder of tech consultancy firm D/D Advisors, remain optimistic about this VR gadget.

“A lot of this is normal growing pains. This is the most complex consumer device anyone has ever made,” the founder stated. Also, Goldberg explained the $3,500 price tag implies Apple accounted for production inefficiency costs.

It knew manufacturers couldn’t create as many units as its other mature products. Consequently, Apple compensated for these projected costs with a higher price point.

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“Someone has to pay for that. I think Apple went into this with a lot of ‘bad yield’ built into the model. There is a lot of technology in the Vision Pro, and they knew it would take a while to scale up. Apple knows they won’t make money on this in the first year.”

Market intelligence firm Canalys believes the Apple Vision Pro will gain over 20 million users within five years of launch. One of its analysts, Jason Low, shared this optimistic message:

“Given the limited production numbers, it will be flying off the shelves, pre-ordered by Apple’s loyal fans and high net worth users in the US.” Moreover, he projected the Silicon Valley giant would produce 350,000 units next year and make 12.6 million units five years later.

Conclusion

Apple Vision Pro production for 2024 reduced from a million units to only 400,000. The iPhone maker said it is struggling with the device’s complexity.

As Jay Goldberg said, it is “the most complex consumer device anyone has ever made.” Perhaps the headset will have enough demand to encourage the tech firm to produce more units.

However, the $3,499 price tag would likely be a deal-breaker for even the most hardcore Apple fans. Check out the features that justify this eye-watering initial price at Inquirer Tech.