Apple’s much-hyped $3,500 “Vision Pro” mixed-reality headset is already running into major production headaches ahead of its launch early next year, according to a report Monday.
The tech giant, which became the first company in history to achieve a $3 trillion market valuation last week, was reportedly forced to “make drastic cuts” to its headset production targets because key manufacturing partners are struggling with its intricate design.
Apple is planning to produce less than 400,000 Vision Pro units in 2024, the Financial Times reported, citing sources close to the company and a Chinese manufacturer called Luxshare, which is reportedly the only company handling assembly of the devices.
Two other Chinese firms that are contracted to provide specific components used in the headsets said Apple is only asking for enough parts to produce 130,000 to 150,000 Vision Pro units next year, according to the report.
The production woes have also forced Apple to delay development of a cheaper version of the headset.
The projected cutbacks reportedly mark a significant reduction in Apple’s previous internal sales expectations, which had set a target of one million units sold in the first year after launch.
The Vision Pro’s OLED displays were described as a “major hurdle” to production, with Apple reportedly unhappy with the ability of its suppliers to churn out defect-free screens.
Apple did not immediately respond to a request for comment on the report.
The company’s stock fell 0.8% on Monday.
The Vision Pro is key to Apple’s long-term plans, with CEO Tim Cook referring to the device as a “spatial computer” that will redefine the company’s product lineup. It is the most significant Apple launch in more than a decade.
In a note to clients last month, Wedbush analyst Dan Ives predicted that Apple would ship about 150,000 units during the first year after launch, with “roughly one million units in year 2 at lower price points.”
Despite its high-profile reveal, the Vision Pro received a somewhat chilly reception at Apple’s Worldwide Developers Conference last month.
Attendees audibly groaned when Apple executives announced the steep price tag and confirmed the headset would not go on sale until early 2024. Other experts pointed to the headset’s bulky design, its lack of a “killer app” at launch and limited battery life of just two hours.
Some critics pointed out that Cook did not wear the Vision Pro or participate in a demonstration of the device’s capabilities at any point during the June presentation.
Ex-Apple executive Tony Fadell, known as the “father of the iPod” due his role in that device’s development, said his former employer had “jumped the shark” with the Vision Pro. He was particularly critical of the device’s price.
Meanwhile, Meta CEO Mark Zuckerberg, whose company is set to release a competing device called the Quest 3 later this fall, argued Apple’s device would result in people sitting on their couches alone rather than staying social and active.
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