Apple Vision Pro Hits Manufacturing Snafu, Causing Production Cuts, FT Says

Apple users will have to live in the real world for a little longer as its mixed-reality Vision Pro headset, unveiled in June and in development for seven years, has hit a manufacturing snafu, the Financial Times reported.

According to multiple people with direct knowledge of the manufacturing process, Apple plans for its Chinese contract manufacturer, Luxshare, to only produce 400,000 headset devices in 2024. However, the production figures could be much lower. 

Two components suppliers said Apple had only requested enough parts for 130,000 to 150,000 next year, while plans to launch a 'budget model' were pushed back.

If this is the case, Wall Street analysts' 2024 sales forecasts of the Vision Pro could be off by hundreds of thousands. Morgan Stanley has forecasted 850,000 units sold next year, while Goldman Sachs expects 5 million. But maybe the voice of reason is Wedbush, who predicted 150,000 units in the first year. 

FT noted one of the major issues holding back production is in the manufacturing process, more specifically, the production of the screens in the device. 

apple vision pro hits manufacturing snafu causing production cuts ft says

Each device has two micro-OLED displays, one per eye, and an outward-facing curved lens called a "lenticular." The inward displays offer the user with stunning resolution while the outward lens projects the image to the real world. 

The people said Apple engineers are not satisfied with the suppliers' productivity. They're disappointed with the low production of micro-OLEDs that are defect-free. FT said, "The displays are the most expensive component in the Vision Pro." 

"A lot of this is normal growing pains," said Jay Goldberg, founder of tech consultancy D/D Advisors. He said Vision Pro is one of the "most complex consumer device anyone has ever made." 

FT's reporting cited unidentified people, and there's no confirmation that production snafus are the reason for lower production estimates next year. Apple may have had to adjust sales because of the underwhelming response from people who can afford a $3,500 headset, while Meta Quest Pro costs a fraction of the price.

Authored by By Tyler Durden via ZeroHedge July 3rd 2023