Apple Inc.'s AAPL highly anticipated Vision Pro headset reportedly faces production woes and slashed targets, raising questions about its future in the mixed-reality market.
What Happened: Apple’s long-awaited mixed-reality Vision Pro headset, unveiled after seven years of development, is facing significant challenges in its production process, leading to drastic cuts in production forecasts.
The headset design’s complexity and manufacturing difficulties have forced Apple to scale back its targets. Plans for a more affordable device version have also been delayed, reported Financial Times citing individuals with direct knowledge of the manufacturing process.
Sources with knowledge of the manufacturing process reveal that Luxshare, the Chinese contract manufacturer responsible for assembling the Vision Pro headset, is expected to produce fewer than 400,000 units in 2024. This represents a significant reduction from earlier internal targets of one million units within the first year.
Notably, Luxshare is reportedly the sole assembler of the device for Apple at the moment.
For the unversed, the Vision Pro headset, priced at $3,500 and hailed as a groundbreaking “spatial computing” device, was initially set to hit the market on June 5. However, Apple later announced that it would become available for purchase early next year.
Industry analysts suggest that the delay is primarily due to supply chain issues rather than app development concerns, the report stated.
Why It's Important: Jay Goldberg, founder of tech consultancy D/D Advisors, suggested that Apple Vision Pro may not yield profits in its first year due to low manufacturing yields.
In April this year, Bloomberg columnist Mark Gurman also said that executives at Cupertino believe that the headset will have a slow start but could eventually replace the iPhone — the company's flagship product.
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