Apple Reduces Vision Pro Production Expectations Due to Design Issues – FT

According to sources familiar with the matter, Apple is facing significant production setbacks for its Vision Pro augmented-reality headset, leading to major cuts in production forecasts. The complexities in design are reportedly the cause of the challenges. The Vision Pro, which was recently launched and slated for release in early 2024 in the United States, comes with a hefty price tag starting at $3,499, making it more than three times the cost of Meta’s high-end mixed and virtual reality headsets.

Luxshare, the Chinese contract manufacturer responsible for assembling the device, is now expected to produce fewer than 400,000 units of the Vision Pro in 2024, as reported by the Financial Times, citing sources close to both Apple and Luxshare. This is a significant reduction compared to Apple’s earlier internal sales target of 1 million units in the first year. Apple and Luxshare have yet to comment on these reports.

The challenges in production primarily revolve around the manufacturing of micro-OLED displays for the device. Apple is said to be dissatisfied with the yield of defect-free micro-OLEDs, contributing to the production difficulties. As a result, the company has requested components from two China-based suppliers to support the production of approximately 130,000 to 150,000 units in the first year. Plans for a more affordable version of the headset have been delayed due to these setbacks.

Luxshare, which had plans to increase its capacity to manufacture nearly 18 million units annually in the future, is reportedly disappointed by the revised production forecast for 2024. Apple’s stock was down 0.3% in premarket trading following the news, even after the company reached a historic milestone of becoming the world’s first $3 trillion-valued company on Friday. Further details regarding the specific challenges faced in production have not been disclosed by Apple or Luxshare at this time.