Apple Makes "Major Cuts" to Vision Pro Production Plans, Says Report
Purported scaling back leaked by manufacturing source.
Apple has made "drastic cuts" to Vision Pro headset production plans, according to manufacturing-side sources talking to the Financial Times. Indications are that the scaling back of orders for the headset have not been spurred by the significant cost of the device, and thus user adoption concerns. Instead, the FT sources say that "the complexity of the headset design and difficulties in production," have impacted hardware production targets.
Plans to release Vision Pro headsets to the public "early next year" were revealed at WWDC about a month ago. Tom's Hardware had eyes on the show and our op-ed sparked a lot of discussion among readers, mostly about Apple's chance of becoming a success in the AR / VR / XR segment, and its $3,499 product pricing.
Apple usually follows up product announcements quick-sharp with product availability, but the Vision Pro was different. After WWDC we were left wondering whether there was a lot of work left to do - and whether manufacturing and / or software development were holding back launch plans.
On the topic of pinch points affecting launch plans, the FT report points a finger pretty squarely at manufacturing. According to our reading of the report, which collects the views of a number of manufacturing insiders and external analysts, a major sticking point is likely centered on the production of the MVision Pro's micro-OLED displays - which are said to be manufactured by Sony and TSMC. This cutting edge tech component, and several more, are so new that it is thought their production processes are prone to very bad yields.
Much of the information unearthed in the FT report appears to come from Luxshare, though some is also said to come from Apple sources. Luxshare is a Chinese IT products contract manufacturer which was formed from the Shanghai-based AR development team previously owned by Taiwan's Pegtatron.
Apple Vision Pro sales targets for 2024 were originally set for a nice round one million units. However, according to FT's sources at Apple and Luxshare, the Cupertino firm is now looking at a more modest 400,000 units shipped in 2024. More worrisome are numbers from secondary suppliers (supplying Vision Pro components) who have apparently been given much smaller orders: only enough to manufacture between 130,000 to 150,000 units in the first year.
Analysts are even more diverse in their predictions for year one Apple Vision Pro headset sales. The FT sites various analyst firms predicting anything between 150k to 5m Vision Pro unit sales in year one. Probably the most detailed predictions come from IT-centric analyst firm Canalys. The FT says Canalys forecasts 350,000 headsets sold in 2024, rising to 12.6 million after five years. Moreover, Canalys expects an Apple Vision Pro user base of 20 million within five years of launch.
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Obviously production is going to have to scale up a lot in the coming years for Canalys estimates to play out. Luxshare has apparently been investing and building plant which could churn out nearly 18m units p.a. in the future, reports the FT. Additionally, some of the early teething troubles we are seeing might be remedied by the arrival of Apple's more affordable 2nd gen headset. The upcoming generation HMD from Apple will, for example, use displays manufactured by Samsung / LG, according to reports. These Korean display makers are already trusted suppliers for lots of other popular Apple devices. When Samsung and LG are ready with Apple headset spec displays we may well see the end of current production issues and Luxshare's production facilities fully unleashed.
Mark Tyson is a news editor at Tom's Hardware. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.
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Giroro This is what happens when you tell 3rd party app developers to waste their own time and money inventing a reason for customers to buy this thing... and the developers said no.Reply -
Sippincider
Us geezers with OpenDoc scars have seen this before...Giroro said:This is what happens when you tell 3rd party app developers to waste their own time and money inventing a reason for customers to buy this thing
The obvious concern is why Apple felt here & now was THE time to announce something this premature (Copland scars showing as well). -
wbfox Yes, good job Apple, pay to build more advanced manufacturing in China. It's time to make Mr. Cook move in with Jack Ma.Reply -
kjfatl
The article indicates that the problem is low manufacturing yields of a cutting edge component. It is not unusual for this type of development to take several years to optimize. Do you remember when flat screen TV's cost more than $10,000. Turn the clock forward a decade or so and there are hundreds of choices of sets available for less than $200, not counting the billions produced at low cost for cell phones. It also takes many years to develop apps for this sort of device. The important thing for Apple is to get these units in the hands of developers.Giroro said:This is what happens when you tell 3rd party app developers to waste their own time and money inventing a reason for customers to buy this thing... and the developers said no. -
bit_user
I really don't follow the Apple rumor mill, but I read somewhere that Tim Cook decided this was the year to "push the bird out of the nest", so to speak, in spite of many at Apple feeling it was still too premature.Sippincider said:The obvious concern is why Apple felt here & now was THE time to announce something this premature
I'm not going to speculate on why Cook might've reached that decision, assuming those reports are even accurate, but it does suggest that even Apple wasn't entirely convinced it was ready.
Of course, that probably has more to do with the technology and not so much with the manufacturing concerns covered by the article. -
bit_user
I'm not sure they have much choice. It's an extremely advanced product and they're using a firm with AR manufacturing experience - that's going to be rare. With a product that's already so risky, you have to try and eliminate risks anywhere you can.wbfox said:Yes, good job Apple, pay to build more advanced manufacturing in China.
In the long term, I'm sure they can diversify their manufacturing of these products. Even the best-case volumes pale in comparison to iPhone, so that's really the ball to keep your eyes on. -
mrv_co
My guess would be that gen1 is not going to be Apple-Margin-Friendly... even at $3,500. Gen1 will be for app developers and gen2 will be the high volume / high margin product they try to sell to users.kjfatl said:The article indicates that the problem is low manufacturing yields of a cutting edge component. It is not unusual for this type of development to take several years to optimize. Do you remember when flat screen TV's cost more than $10,000. Turn the clock forward a decade or so and there are hundreds of choices of sets available for less than $200, not counting the billions produced at low cost for cell phones. It also takes many years to develop apps for this sort of device. The important thing for Apple is to get these units in the hands of developers. -
scottslayer What was Apple really expecting though?Reply
The project has been in development hell for something like 15(!) years and has been referred to multiple times internally(!) as a massive money sink.
Tim Cook had to threaten the division to actually produce something marketable or else. The VR division then finally deign to announce its release as a halo product, cripple the ability of users to get the most use out of it, and lean completely on developers to sell their product.
Bravo Apple. -
bit_user
Because:scottslayer said:What was Apple really expecting though?
The project has been in development hell for something like 15(!) years and has been referred to multiple times internally(!) as a massive money sink.
Tim Cook had to threaten the division to actually produce something marketable or else. The VR division then finally deign to announce its release as a halo product, cripple the ability of users to get the most use out of it, and lean completely on developers to sell their product.
They decided to tackle AR, not VR.
Because it's Apple, they're perfectionists.
If you want to do it really well, AR is much, much harder than VR.
The technology barely exists to do AR well.
Because it's Apple, they think they can make expensive hardware and people will still buy it. Hence, not as much focus on cost-control or manufacturability as most companies would do.
Sadly, the thing is so bulky that initial applications will be more VR than AR, because the necessary tech to make a fashionable and unobtrusive AR of that caliber still isn't quite there.
So, maybe it's a story of overestimating their abilities and how quickly the necessary tech will arrive.