Growing a category with the Apple Vision Pro has been more challenging than what the company would have anticipated, as the $3,499 price tag will only encourage a minute number of consumers to turn a head-mounted computer into their daily driver. Unfortunately, one report states that selling a more affordable AR headset might not be sufficient to help grow this division.
Report states that even if a more affordable Apple Vision Pro model is offered for $1,500, consumers may still go for the ‘safer pick’
The Apple Vision Pro successor was planned before the first model was announced at WWDC 2023, but Bloomberg’s Mark Gurman states that the launch of future models might not make it possible for this category to bring in the same business as an iPad. Gurman reports in his Power On newsletter that even with an average sales price of $3,700, which includes prescription lenses and accessories, Apple only stands to generate around $1.5 billion in annual revenue with the limited units it is going to sell.
To just reach the current stage of Apple’s Mac business, the company has to increase the growth of its AR headset by 20 times to about eight million yearly shipment units, and that, right there, is a tall ask. Even with a more affordable Apple Vision Pro model, consumers stand to pick something they believe will give them more utility out of their purchase: a Mac, iPad, or iPhone.
“If Apple hits the low-end of that range at an average sales price of $3,700 — incorporating optional prescription lenses and extras — that’s about $1.5 billion in revenue in year one. To become an iPad-sized business, the category would have to grow by 20 times to about 8 million units annually.
Given the device’s drawbacks and price, that will be all but impossible in the foreseeable future. To be sure, plans for a cheaper model, subsequent versions with new features like better connectivity to the Mac, improved video conferencing, cellular connectivity, and a slimmer form-factor will get Apple closer to that goal.
But even if a cheaper version comes in at $1,500 to $2,000, I think most people will still opt for the safer pick: the Mac, an iPad or other existing devices. And that will be the case for most consumers until Apple can get the product down to the price of an iPhone and into a form closer to a pair of eyeglasses.”
Another problem that Apple needs to fix is the number of suppliers. At this time, only Sony supplies the two 4K microLED panels for the Apple Vision Pro, which costs the technology giant $700 for both pieces, but there is another problem. Companies like LG and Samsung are experiencing production problems of their own, so for a few years, Apple might have little choice but to stick with Sony, and the Japanese manufacturer refuses to increase production, limiting its capacity to 900,000 display units in a 12-month period.
Gurman has not listed any proposed solution from Apple, but even with the first model, the company does not intend to sell to consumers directly but through an appointment system, adding another layer of complication to the process. For now, Apple’s AR headset business may only grow slowly, and investors may believe that there are other resources for the California-based giant to invest in.
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