- tech360.tv
Apple Slashes Production of Vision Pro Headset by Half Due to Design Challenges
Updated: Jan 2
Apple reduces planned output of the US$3,499 augmented-reality device to 400,000 units in 2024, facing complex design issues.
Apple and its Chinese suppliers have remained silent following a recent Financial Times report revealing that the tech giant is drastically reducing the production volume of its Vision Pro headset. Initially aiming for 1 million units in the first year, Apple has now scaled back the target to 400,000 due to intricate design complications. Unnamed sources from Apple and Chinese assembler Luxshare Precision Industry provided insights for the FT report.
Fluctuations in order volume have a significant impact on the performance of Apple suppliers, making production targets a matter of great interest for investors. On Wednesday, Luxshare's shares in Shenzhen closed 0.94% lower, resulting in a 3.82% increase for the week.
Despite numerous requests for comments, both Apple and Luxshare Precision have yet to respond. In contrast, Bozhon Precision Industry Technology, an electronics firm based in Suzhou involved in the assembly process, claimed it was unaware of any production cuts. However, the company's official refrained from disclosing any client-related information.
Bozhon shares experienced a decline of 0.56% on Wednesday, culminating in a 0.43% loss for the week. Luxhare Precision cited confidentiality when asked about production plans, as reported by ThePaper.com, a Chinese media outlet.
As China is poised to become the manufacturing center for the Apple headset, expectations were high among Chinese manufacturers for this new revenue stream. The production of Apple's first major product in a decade was anticipated to replicate the success of globally sought-after items like the iPhone, which led to the rise of assemblers such as Hon Hai Precision Industry, also known as Foxconn Technology Group.
Apple CEO Tim Cook heralded the Vision Pro as the harbinger of a “the beginning of a new era for computing” enabling users to engage with digital content, including games and 3D videos, superimposed onto physical environments. However, industry analysts remain cautious about the immediate market response to the headset. Kuo Ming-chi, a renowned analyst at TF International Securities, expressed doubts regarding the device's integration into everyday life and emphasised the need for an appealing ecosystem, app and content before its launch.
Wedbush Securities' Managing Director, Dan Ives, predicts an initial shipment of approximately 150,000 units in the first year, followed by 1 million units in the second year, with lower price points.
According to the Financial Times report, Apple has limited its request for components to 130,000-150,000 units in the first year from two Chinese suppliers. Additionally, plans for a more affordable version have been postponed.
Apple reduces planned production of Vision Pro headset from 1 million units to 400,000 due to design challenges.
Silence from Apple and Chinese supplier Luxshare Precision regarding the report.
Luxshare's stock decreases by 0.94% while Bozhon Precision experiences a 0.56% decline.