Apple makes drastic cuts to Vision Pro headset production

Manufacturing problems cause Apple to reduce the production of its new "spatial computing" headset.
Shubhangi Dua
Apple Vision Pro to scale back production
Apple Vision Pro to scale back production

Apple / YouTube 

Apple's highly-anticipated Vision Pro mixed reality headset seems to have been hit by some early production problems.

The device, which was seven years in development, and launched to great fanfare at WWDC 23 last month was thought to be the most significant Apple product launch since the iPhone.

However, the Financial Times reports today that the Cupertino-based tech-giant is limiting production of the product.

Drastic reductions

“Apple was forced to decide to make drastic cuts to production forecasts,” FT says, due to the complexity of the headset design and difficulties in production.

The gadget, which costs $3,499, will now face production limits with just 400,000 units launching next year instead of initial plans to distribute immediately after launch in June 2023. 

The news comes from unidentified sources close to Apple and Luxshare Precision Industry Co., the Chinese firm that’s initially assembling the device according to Bloomberg

FT says, “two China-based sole suppliers of certain components for the Vision Pro said Apple was only asking them for enough for 130,000 to 150,000 units in the first year.”

With the firm’s first-year sale target of one million, this is likely to push back production numbers and delay distribution, with FT forecasting a significant cut in manufacturing volume. 

Founder of tech consultancy D/D Advisors, Jay Goldberg said, “a lot of this is normal growing pains, this is the most complex consumer device anyone has ever made.”

Unattainable expectations

Tech experts allude to Apple's lack of confidence in their ability to scale production due to missed deadlines. 

They believe that the challenge in design arose while manufacturing Vision Pro’s sleek screens as it comprises two micro-OLED displays catering to both eyes separately. Equipping the outward-facing, curved “lenticular” lens has also proven difficult. 

FT says that the headsets’ inward displays offer a resolution exceeding anything currently on the market, while the outward lens projects the headset wearer’s eyes to the outside world.

The lenses are reportedly the most expensive component of the device. The prototypes of the micro-OLED display were supplied by Sony and the chipmaker TSMC. 

Despite successful demonstrations at the launch, Apple was thought to be dissatisfied with the yield of the displays, unidentified sources said. 

Goldberg says, “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.”

Terushi Shimizu, head of Sony’s semiconductor unit in a recent media roundtable said that Sony was apprehensive about the VR market, and thus was reluctant to step-up production. Although, they are constructing a new plant with the aim of ramping up production for the chips used in smartphone cameras. 

“We will be watching to see how much demand [for micro-OLED displays] will increase, Shimizu said, “but I don’t think we will be aggressive [in producing] in the same scale as image sensors.”

Affordability on the horizon

Apple Vision Pro mixed-reality headsets launched last month at its annual event WWDC, entering the market to compete with more inexpensive versions including the META Quest Pro starting at $499.

The California-based company further plans to curate a generation of headsets including affordable formats that appeal to the mass consumer market, FT reports. However, the production of these has also been pushed back. 

The second-generation Vision Pro is being designed in collaboration with Korean display makers Samsung and LG. The goal is to reduce costs by incorporating mini-LED technology; however, so far, it has not met Apple's expectations.

Irrespective of the challenges encountered, a market intelligence group, Canalys believes that Apple will have a thriving user base of more than 20m Vision Pro users within five years of launch.

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