Apple’s $3,500 Vision Pro Faces Market Headwinds as Production Scales Back
Apple is quietly scaling back production of its ambitious Vision Pro headset, signaling potential troubles for the tech giant’s $3,500 venture into virtual and augmented reality. Industry insiders reveal that manufacturing rates have dropped significantly, even as CEO Tim Cook maintains an optimistic public stance about the device’s future.
Production cuts signal market challenges.
Luxshare, Apple’s Chinese manufacturing partner, has reportedly reduced daily production from 2,000 to approximately 1,000 units per day. More concerning for the future of the device, Apple has reportedly informed Luxshare that production may need to “wind down” entirely by the end of November.
These manufacturing adjustments come as sales figures paint a sobering picture. Counterpoint Research estimates that Apple sold approximately 370,000 Vision Pro units in the first three quarters of 2024, with predictions of only 50,000 additional sales expected for the remainder of the year.
Market Competition and Price Point Challenges
The Vision Pro’s struggles become particularly apparent when compared to its main competitor. Meta, formerly Facebook, has experienced significantly stronger sales with its Quest headset line.
- Quest 2: Approximately 6 million units sold
- Quest 3: About 3 million units sold
- Price difference: Meta’s Quest 3 sells for $500 compared to Vision Pro’s $3,500.
Cook’s Response and Future Strategy
Tim Cook has attempted to frame the situation positively, describing the Vision Pro as an “early- adoptive product” rather than a mass-market device. “People who want to have tomorrow’s technology today—that’s who it’s for,” Cook stated in a recent interview. He draws parallels to other successful Apple products like the iPod, iPhone, and AirPods, which also faced initial adoption challenges.
However, Apple’s actions indicate an internal concern about the product’s performance.
- We have suspended the development of the Vision Pro 2.
- Focus has shifted to a more affordable model with fewer features.
- The target release date for the budget version is late 2025.
- The lifetime production estimates have been reduced from 8 million to 4 million units.
User Feedback and Technical Challenges
Early adopters have reported several issues with the Vision Pro.
- Eye strain from the display
- General discomfort during extended use
- Software bugs and performance issues
- Screen lag and occasional freezing
- Price-to-value concerns
Industry Impact and Future Outlook
This setback for Apple raises broader questions about the immediate future of consumer AR/VR technology. While enthusiasts compare the Vision Pro’s price point to the original Macintosh (approximately $7,300 in today’s dollars), the market appears hesitant to embrace such expensive AR/VR solutions.
Apple’s pivot toward a more affordable model suggests a recognition that mass adoption of AR/VR technology may require a different approach than the company’s traditional premium pricing strategy.
What’s Next for Apple?
As Apple adjusts its AR/VR strategy, several key developments bear watching:
- Development of a cheaper vision device
- Potential software improvements for existing units
- Impact on the broader AR/VR market
- Competition’s response to Apple’s challenges
The coming months will be crucial in determining whether Apple can successfully navigate these challenges and find its footing in the emerging AR/VR market space.