Apple slashes Vision Pro targets amid production woes

Apple is cutting production forecast for Vision Pro as manufacturers are struggling to get a grasp of the novel design of the mixed-reality headset, Financial Times reported.

The complex design and difficulties in manufacturing are behind the forecast cut, while plans for a more affordable version of the headset have had to be pushed back, the report added citing people with knowledge of the production process.

The tech giant is preparing to make less than 400,000 units of the $3,499 priced device in 2024, the report noted citing two people close to Apple and Luxshare Precision Industry, the Chinese company tasked with initially assembling the device.

Two China-based parts suppliers of the headset noted that Apple was only asking for enough parts for 130,000 to 150,000 units in the first year, while plans for a cheaper priced version of the device have been pushed back.

Apple had already noted that Vision Pro will not go on sale until early next year. The AR/VR headset, which marked Apple’s biggest entry into a new product area in nearly a decade, was launched on June 5 at the company’s annual Worldwide Developers Conference.

The cuts to the production targets are significant, considering an earlier internal sales target of 1M units for the first year, according to the report.

Among the obstacles being faced by the manufacturers is the sleek screens for the headset. The device consists of two micro-OLED displays, one for each eye, and an outward-facing, curved so called ‘lenticular’ lens. The inward displays provide a resolution surpassing anything which is in the market currently. The outward lens projects the device wearer’s eyes to the outside world.

The micro-OLED displays for the prototypes in the June event were provided by Sony and the chipmaker Taiwan Semiconductor Manufacturing (TSM), the report noted as per two people with knowledge of the situation.

The news agency added that Sony declined to comment on any role for the Vision Pro headset.

The tech giant is not pleased with suppliers’ productivity, as per these people, especially with the yield of micro-OLEDs which are free of defects. The displays are the most expensive parts of the device.

Apple is also working with Samsung and LG on the second-generation of the headset, including a cheaper version of the device. Apple has thought of using other display technologies, including mini-LED, but the company has insisted on using micro-OLED even for the non-Pro device, even though suppliers had so far failed to match the iPhone maker’s expectations, the report added citing the two people.

Apple created Wall Street history last week after its market cap surpassed $3T, while analysts continued to heap an extra dose of love for the world’s most valuable company. Apple’s (AAPL) Vision Pro is likely to be a potentially big competitor to Meta Platforms’ (META) mixed reality headset Quest 3, among other.

Meta CEO Mark Zuckerberg was reportedly unfazed by Apple’s headset, noting that the two companies’ vision for the technology is different. Zuckerberg had also touched upon the much talked about aspect of the device, its pricing, as Quest 3 is much cheaper at $499, compared to $3,499 for the Vision Pro. Seeking Alpha