Apple's fancy Vision Pro Headset, packed with advanced features, isn't selling as well as it was expected, which might be a letdown for the company.
Because of its high price, it was unlikely that the Vision Pro Headset would become popular with the general public since it's more of a ‘niche product’. However, Apple didn't anticipate that it would have such a short lifespan, especially considering the positive reviews and feedback it received at launch. Despite early excitement about its features, it's failing to keep customers interested after the initial period.
Apple Slashes Production
A veteran Apple Analyst Ming-Chi Kuo revealed in a recent blog post that Apple Vision Pro is struggling with low demand, forcing Apple to slow down shipments for the Vision Pro in 2024 and rethink their strategy.
Even before its international release, Apple had cut orders for the Vision Pro. Kuo mentions that Apple has slashed its 2024 shipment forecast for the Vision Pro headset to 400,000 to 450,000 units, a significant decrease from the initial expectation of 700,000 to 800,000 units.
This significant decrease in Vision Pro shipments for its international release is due to demand dropping "far below expectations" in the US market, following a likely strong initial surge of orders from devoted Apple enthusiasts. According to Kuo, this decision precedes the Vision Pro's launch outside the US, indicating its direct impact on production plans.
“Apple cut orders before launching Vision Pro in non-US markets, which means that demand in the US market has fallen sharply beyond expectations, making Apple take a conservative view of demand in non-US markets,” Kuo says in the post.
Delay in Launch of Cheaper Version beyond 2025
Well, Apple Enthusiasts, here's bad news for you all. As stated earlier, the demand for the product is so low, that Apple is rethinking and adjusting its whole headset strategy, as Kuo suggests.
Apple might delay the launch of a ‘cheaper’ mixed-reality headset beyond 2025. Previously, it was anticipated that a second-generation Vision Pro might launch in 2025 available in both high and low-end versions, but Kuo now suggests it might not happen.
If the affordable Vision Pro had been launched as per the plan, it may have opened up Apple’s “spatial computer” concept to a wider audience. But it has now been shelved.
Why? Kuo thinks that the demand for certain VR and AR parts, like Micro OLED displays, might not be high enough for mass production in other gadgets.
What went wrong?
Crazy Expensive
The Apple Vision Pro costs $3,500, which is very expensive and turns away many buyers. Also, in the world of mixed reality and virtual reality, Meta dominates with its Meta Quest 3 headset, which is much cheaper and has more gaming and software features.
Limited to ‘US’ markets
Apple has only released the Vision Pro in the United States, so its popularity is restricted to that area. It's uncertain whether the product will catch on outside of the US. While Apple has confirmed the Vision Pro's shipment to mainland China and is getting visionOS ready for multiple languages, such as French, German, Japanese, Korean, Cantonese, Simplified Chinese, and Traditional Chinese, there's still no news on its availability internationally. The upcoming WWDC event, set for June 10-14, might be when Apple announces international availability and feature updates for visionOS.
A Niche Market
The Apple Vision Pro was introduced into a specific market and lacks many gaming features. It relies on Apple's VisionOS for its functions. Unfortunately, app development for this platform has been slower than expected, and other platforms offer better apps.
Slow adoption of AR/VR technology
Apple isn't alone in experiencing slow adoption of AR and VR technology. Sony also reduced shipments of its PS VR2 earlier this year when sales of the gaming headset fell short of expectations. In March, Bloomberg reported that Sony had stopped production of the PSVR2 due to excess inventory in warehouses. This decision followed an earlier Bloomberg report from January 2023, indicating that Sony had already scaled back production orders due to relatively low pre-orders. Even the popular Meta Quest headset series has faced challenges recently. Meta has acknowledged difficulties in keeping Quest users engaged after purchase, as stated in mid-2023.
However, there's a chance Kuo's report today might be wrong, and Apple planned to ship around 400,000 units all along. It's worth noting that last July, the Financial Times said Apple aimed to make and deliver about 400,000 Vision Pro headsets in 2024. Apple might have changed this goal between July and the headset's release in February this year, only to lower it again.
Also, Kuo's recent report contrasts sharply with what he said in February 2024. He previously mentioned that leading up to the global release, demand for the $3,500 mixed reality headset in the US was initially better than expected in its first month after its February 2nd launch.
Overall, Apple reducing the production for the Vision Pro is concerning, potentially impacting the introduction of new technologies. A more affordable model could attract customers, but if the Vision Pro fails, it may hinder advancements in the VR headset industry.
(Inputs from Agencies)
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