Apple Vision Pro production suffers major cuts

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Apple has to drastically reduce production projections for its mixed-reality Vision Pro headset. It launched last month after seven years of research. And it has been regarded as the company’s most significant product launch since the iPhone.

According to people with direct knowledge of the manufacturing process, the intricacy of the headset design and challenges in production are driving the scaling down of objectives. So, plans for a cheaper version of the gadget have to be pushed back.

Apple has previously stated that the $3,500 “spatial computing” headgear gadget will not be available until “early next year,” a significant delay from its June 5 release date. Analysts believe this has more to do with supply chain issues than with giving developers time to create apps for the Vision Pro.

According to two sources close to Apple, Luxshare, the Chinese contract manufacturer that will first build the gadget, is planning to produce less than 400,000 devices in 2024. According to many industry insiders, Luxshare is presently Apple’s only device assembler. Separately, two China-based sole suppliers of key Vision Pro components claimed Apple had only requested enough for 130,000 to 150,000 devices in the first year.

Both forecasts suggest a major reduction in output from a previous, internal sales objective of one million units in the first year. According to analysts and industry experts, the low volume prediction reflects Apple’s lack of trust in scaling manufacturing after years of missed deadlines for introducing the iPhone.

Wall Street analysts’ predictions for Vision Pro sales range from the low hundreds of thousands to several million in its first year. A month ago, Wedbush anticipated Apple would sell approximately 150,000 devices in the first year. Morgan Stanley expected 850,000 and Goldman Sachs predicted 5 million sales by 2024. Apple, on the other hand, sold 1.4 million iPhones in its first year on the market.

Apple, whose market capitalization surpassed $3 trillion on Friday, has yet to comment on the Vision Pro.

A few challenges

Manufacturing of the device’s slim displays is one of the primary challenges. They have two micro-OLED screens, one for each eye, and an outward-facing, curved “lenticular” lens. The inner displays outperform anything currently on the market in terms of resolution. And the outward lens broadcasts the headset wearer’s gaze to the outside world.

Sources say Sony and the chipmaker TSMC supplied the micro-OLED screens for the prototypes in the June showcase.

According to those sources, Apple has been dissatisfied with its suppliers’ productivity, particularly the yield of defect-free micro-OLEDs. The Vision Pro’s screens are the costliest components.

On this second-generation headgear, Apple is collaborating with Korean display manufacturers Samsung and LG. To drive down the price, Apple has investigated various display technologies, such as mini-LED. Two sources said Apple was adamant on using micro-OLED even for the non-Pro headset. And all vendors had so far failed to meet its expectations.

According to one individual close to the assembly, the reduction in 2024 predictions has frustrated Luxshare. It is preparing to construct over 18 million units yearly in the following years.

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Author: Francis Rey

Francis is a voracious reader and prolific writer. He has been writing about social media and technology for more than 10 years. During off hours, he relishes moments with his wife and daughter.

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