Apple's ambitious foray into the world of high-tech headsets seems to have hit a snag with its first-generation Vision Pro. As the year draws to a close, reports indicate that production of the Vision Pro may have ceased, a decision likely driven by lower than expected demand and earlier production cuts. The Information's Wayne Ma first hinted at this downturn in October, noting that Apple had scaled back its production significantly, with insiders suggesting the company might stop manufacturing the device entirely by the end of 2024.
Inside the Production Slowdown
The shift in Apple's strategy became apparent in early summer when production was dialed back significantly. Sources directly involved in the supply chain revealed that this reduction was not sudden but part of a calculated move by Apple, which now has enough Vision Pro units to last until 2025. This approach is reminiscent of Apple's handling of other low-demand products in the past, like the iPhone 12 mini. Despite starting the year with robust production rates, the Vision Pro's assembler, Luxshare, saw a drastic cut in its manufacturing quota by November. At its peak, Luxshare produced around 2,000 units daily, but this number halved by fall, indicating a clear mismatch between inventory levels and actual sales.Pricing and Content: The Achilles' Heel
The Vision Pro, retailing at a steep $3,499, struggled primarily due to its hefty price tag and a limited content ecosystem. This lack of engaging content, coupled with the high cost, positioned the Vision Pro as more of a niche product for tech aficionados rather than a mainstream gadget. Apple CEO Tim Cook has even referred to it as an "early-adopter product," targeting a specific market segment rather than the general consumer base.
A Glimpse Into the Future: What's Next for Apple's VR Endeavors?
Interestingly, while the first-generation model faces obsolescence, Apple isn't bowing out of the virtual reality scene just yet. The company has allegedly put a temporary hold on the development of a second-generation Vision Pro to instead focus on a more budget-friendly VR headset. This strategic pivot suggests Apple is recalibrating its approach to capture a broader audience, with plans to produce four million units of this lower-cost model—a stark contrast to the production levels planned for the original Vision Pro. Moreover, despite the current pause, Apple is rumored to be working on an incremental update to the Vision Pro, potentially introducing an M5 chip and minor design tweaks. This move, as suggested by experts like Kuo and Bloomberg's Mark Gurman, could help Apple manage excess inventory while keeping the product line somewhat fresh until a more significant upgrade can be launched between fall 2025 and spring 2026.