Apple analyst Ming-Chi Kuo claims Apple is putting the brakes on production of the spatial computing headset due to low demand; the Vision Pro launched in the US earlier this year.
Apple has cut Vision Pro production due to low demand for the $3,500 mixed reality headset, according to Ming-Chi Kuo, an Apple analyst at TF International Securities.
Apple reduced shipments to between 400,000 and 500,000 units for the year, despite “market expectations” of around sales of 700,000 to 800,000 units, Kuo said in a blog post Wednesday.
Apple cut orders ahead of a planned international launch for the device, said Kuo,
Because of a sharp fall-off in demand in the US, Kuo had earlier claimed that between 160,000 and 180,000 of the spatial computing devices were sold in preorders before the February launch. But sales quickly slowed after that early burst of interest and Apple now takes a “conservative view” of demand outside of the US, Kuo said this week. (Bloomberg’s Mark Gurman reported this week that demand for Vision Pro demos in Apple stores has also fallen off significantly as interest waned.)
Apple now expects Vision Pro shipments to decline year on year in 2025, Kuo said, prompting Apple to review and adjust its product roadmap; plans for a second Vision Pro in 2025 are now reportedly on hold.
Apple may shed more light on the situation when it releases its Q2 financial results next Thursday.
Wider predictions for Vision Pro sales have varied significantly, and it’s difficult to point to a consensus on market expectations. According to an Ars Technica report in June 2023, Wedbush Securities forecast around 150,000 units in the first year of sales; Morgan Stanley expected sales of around 850,000; and Goldman Sachs predicted sales as high as 5 million.
It was rumored that Apple initially hoped to sell 1 million of the devices in the first year on sale, according to a Financial Times report in 2023; that expectation was later revised down due to production issues.
Morgan Stanley analysts predicted in January that Apple would ship between 300,000 and 400,000 headsets in 2024, according to a CNBC report, while a Wedbush analyst put the figure at 600,000 units for the year, according to Business Insider.
Kuo himself forecast sales of around 500,000 units for 2024, according to a January blog post.
What seems clear is that the Vision Pro will make up a relatively small part of the total market for AR/VR devices, which remains a niche product category.
While the first-generation device is powerful and impressive, said Ramon Llamas, research director with IDC’s devices and displays team, consumers still need to be convinced of its value and utility.
“As a multimedia consumption device, it is pushed up hard against consumers’ large screen televisions and computers,” he said. As a workplace productivity device, he added, it “remains to be seen exactly how it increases efficiency and productivity altogether.
“On top of this, the price most likely makes a lot of people balk,” said Llamas.
The wider market for AR/VR devices is expected to return to growth in 2024, up 44% from the previous year to 9.7 million units, according to IDC data. This follows a tough year in 2023, when headset sales declined 23.5%.
Meanwhile, Apple touted the enterprise potential of the Vision Pro earlier this month.
“There’s tremendous opportunity for businesses to reimagine what’s possible using Apple Vision Pro at work,” Susan Prescott, Apple’s vice president of worldwide developer relations and enterprise marketing, said in a blog post, pointing to VisionOS apps from the likes of SAP, Lowe’s, Porsche, and others.
