Apple has dramatically reduced Vision Pro mixed reality (MR) headset shipments since mid-2024, with production potentially halting by year-end due to declining demand, reports The Information via Reuters, AppleInsider, and 9to5Mac.
According to HKET, some upstream suppliers paused Vision Pro component production as early as May 2024 following Apple's revised sales forecasts, leaving thousands of parts undelivered in warehouses. Apple has also reportedly halted work on the next-generation Vision Pro, signaling a shift toward cost-effective models aimed at broader market appeal.
An internal source from Luxshare Precision revealed that Apple may stop Vision Pro production by November 2024. Daily output has already dropped from 2,000 units to fewer than 1,000, though the production lines remain active for quick resumption or to assemble a more affordable Vision Pro model with minimal reconfiguration.
Neither Apple nor Luxshare has commented on the recent reports thus far.
Following its February 2024 launch, Vision Pro initially gained traction but saw sales drop sharply due to its US$3,500 price. In contrast, Meta's Quest 3 is priced at US$500, with the Quest Pro available for US$1,000. Analysts expect Vision Pro sales to reach 370,000 units by the third quarter of 2024, with another 50,000 units forecast by year-end, according to Ifeng and QQ News.
Industry sources indicate Apple is developing a more affordable Vision Pro model with reduced features and downgraded hardware, priced around US$2,000. Expected by late 2025, it will feature lower-resolution displays and omit the EyeSight function to lower production costs.
Chinese suppliers remain crucial despite production cuts
Luxshare has produced 500,000 to 600,000 units of the Vision Pro, but 200,000 units remain in inventory, enough to meet demand until new models arrive. This surplus highlights the challenges of Apple's high-end strategy, forcing swift adjustments to keep pace with evolving market trends.
Despite scaling back high-end product development, Apple continues to view China as key to future growth, reports Xinhua. Major partners like Luxshare, Lens Technology, and Goertek remain integral to Apple's supply chain and market expansion strategy.
Lens Technology is expanding its production lines to support the affordable Vision Pro and other devices, reinforcing the importance of Chinese suppliers in Apple's market realignment strategy.
Since 2020, Apple's three major suppliers have experienced varied performance. While Lens Technology and Goertek faced slowing or declining profit growth, Luxshare maintained steady growth.
Tim Cook has often stressed the importance of China's supply chain to Apple's success. During a March 2024 session with key suppliers, he praised China's stability and efficiency as unmatched advantages, reports East Money.
On October 23, 2024, Apple COO Jeff Williams visited Lens Technology's Changsha factory with chairwoman Qunfei Zhou to inspect iPhone production. The day before, he toured Luxshare's Kunshan and Suzhou facilities with chairwoman Laichun Wang.
During his visits, Williams highlighted the crucial role of supplier partnerships, noting that Apple's product success depends on these collaborations. These visits underscore Apple's commitment to nurturing strong ties with its Chinese supply chain partners, ensuring smooth operations and continued production excellence.
Apple and Luxshare are expanding production into Southeast Asia, particularly Thailand, to mitigate geopolitical risks and enhance flexibility. This strategy reflects Apple's effort to diversify its supply chain for greater resilience and competitiveness, as reported by KrASIA and Nikkei Asia.
The company's rapid strategy shift underscores its market agility. Through the development of an affordable Vision Pro and expanded supply chain efforts in China and Southeast Asia, Apple seeks to reclaim market share and counter competition from rivals such as Meta.
