Recent insider reports suggest that tech giant, Apple Inc. contemplates on cutting back on the production of its luxury Virtual Reality (VR) headset, the Vision Pro. This information is paired with further rumors of the delay in releasing a more economically priced variant of the headset. These conjectures that originated even before the official Vision Pro announcement, coupled with its steep $3,500 cost, have left industry observers in a state of uncertainty.
The hefty price tag on the Vision Pro appears to be a recurrence of Apple's renowned upscale pricing, coupled with the peculiarity of being a first-generation product. The product reportedly emerged after nearly a decade of dedicated Research and Development (R&D) and the establishment of distinct hardware parts, factors that undoubtedly escalated the pricing.
While it's common knowledge that production scaling usually drives down hardware costs, the introduction of cutting-edge technologies into the market commonly carries high premiums. The Vision Pro's 4K displays — a novel technological addition to the device — seem to have played a key role in the surging costs and are supposedly a major factor in this alleged down-scaling of production. However, these production cutbacks appear to be more related to manufacturing constraints rather than demand predictions.
A piece by The Financial Times, citing confidential sources close to Apple and contract manufacturer Luxshare, indicates that manufacturing hitches have resulted in reduced Vision Pro orders. Apple is believed to have requested Luxshare to manufacture fewer than 400,000 units in the coming year — a significant decrease from an initial internal sales objective of one million. Luxshare, the Chinese corporation apparently acting as Apple's sole Vision Pro assembler, along with Apple, declined to provide any comment on these speculations.
The impact of the pandemic has caused disruption in manufacturing over the last few years, resulting in numerous issues. Even Apple has not managed to escape these disturbances for its existing devices fully. The inclusion of micro-OLED displays in its products has further complicated these problems. However, the adoption of this technology by other devices could potentially increase production volumes and lower prices, even though mixed reality headsets are still an untested category.
Another repercussion of these supposed changes includes the delay in launching a more affordable version of the headset that was previously speculated to be released in 2025. With the lower-cost model, the company is arguably anticipating a broader market adoption of the Apple Vision headset, following the Pro. This strategy is partly aimed at drawing the interest of developers and corporations.
In its preliminary phase, the product has received positive responses from journalists, and it is likely to attract more attention upon its actual release early next year. However, for a company like Apple and its stakeholders who are accustomed to blockbuster products, these deliberate strategic changes could potentially lead to some frustration.
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