Apple cuts Vision Pro targets after production issues, says FT report

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Apple Inc. is slashing production targets for its Vision Pro headset because manufacturers are struggling with the novel gadget’s complex design, the Financial Times reported.

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Apple is now preparing to make fewer than 400,000 units of the US$3,499 headset in 2024, the Times said, citing unidentified people close to Apple and Luxshare Precision Industry Co., the Chinese firm that’s initially assembling the device. Two China-based suppliers of components said Apple was only asking for enough parts for 130,000 to 150,000 units in the first year, while plans for a cheaper version have been pushed back, the newspaper reported.

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Luxshare stock pared earlier gains but was still up about 3.8 per cent on July 3 in Shenzhen. Apple was down about 0.9 per cent at US$192.24 at 11:46 a.m. EDT in New York.

The news “isn’t surprising to us, as it’s a first-generation product,” Bloomberg Intelligence analysts Anurag Rana and Andrew Girard said in a note. “Our original thesis called for only 500,000 units in the first year (half Apple’s original expectation) given the headset’s $3,500 price tag. We don’t expect the product to have significant financial impact for the next three years.”

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Apple recently made Wall Street history after its market value climbed past US$3 trillion, as investors continued to pile into big tech firms.

The Vision Pro, unveiled last month, is the company’s latest move to sustain sales momentum and try to propel a mixed-reality industry that for years has struggled to make it into the mainstream. The device, which resembles high-tech ski goggles, will have its own operating system, visionOS, and a dedicated App Store. It’s slated to arrive early next year in the U.S., followed by other regions later.

But the new projections are down sharply from a previous internal sales target of 1 million units in the first 12 months, according to the Financial Times.

A major hurdle is the creation of high-resolution inward displays, while projecting the wearer’s eyes to the outside world, the paper said. Apple is also working on a more affordable version of the headset with Korean display makers, the paper said, citing two people with direct knowledge.

Apple and Luxshare didn’t respond to requests for comment.

— with assistance from Debby Wu, Edwin Chan and Natalie Lung