Fall of Vision Pro: Why Apple is Scaling Back Production of Headset?

Apple has reduced production of its $3,500 Vision Pro headset, marking a strategic and silent retreat from augmented and virtual reality. According to one worker at Luxshare, a Chinese company contracted to complete Vision Pro's final assembly, the tech giant told them that production of the product might have to "wind down" by the end of November. Apple's decision to scale back production of the Vision Pro headset and potentially discontinue it reflects poor sales and the product not being liked by consumers.

Overview of Apple Vision Pro Discontinuation

• Despite an initial strong response, with nearly 200,000 units sold shortly after launch, the Vision Pro has struggled to maintain momentum. Reports indicate that Apple has only managed to sell around 370,000 headsets this year, with projections suggesting only 50,000 more sales before the year ends. The high price point of $3,500 has been a significant barrier to mass-market adoption.

• Apple has informed its suppliers, including Luxshare, that production may need to "wind down" by the end of November 2024. This move comes as Apple reportedly has enough inventory to meet projected demand through the product's lifecycle. The company currently produces about 1,000 headsets per day, which is half its peak production capacity.

• CEO Tim Cook acknowledged that at $3,500, the Vision Pro is not a mass-market product but aimed at early adopters interested in cutting-edge technology. This pricing strategy has positioned it awkwardly against competitors like Meta's Quest series, which offers similar features at significantly lower prices (e.g., Meta Quest 3 starting at $499).

Reasons for Silent Discontinuation of the Vision Pro

By not making the discontinuation of the Vision Pro a public spectacle, Apple seems to be adopting a careful strategy. This might be a tactic to change course and create a headset that is more reasonably priced without calling attention to the shortcomings of its flagship AR/VR device. Apple can manage its current inventory without causing fear or unhappiness among people who might still be interested in buying the device by gently ending production. Reports indicate that Apple is halting work on a second-generation Vision Pro headset and may redirect resources towards developing a more affordable model (rumoured to be called "Vision SE"), which is expected to launch in 2025.

Vision Pro suggests challenges in Apple's AR/VR strategy.

Although Vision Pro's termination may point to difficulties in Apple's AR/VR strategy, it only sometimes means the company is at a standstill. Instead, it represents a recalibration based on customer demand and market input. According to Apple's past, it frequently takes time to refine goods and determine which markets they are most suited for. Before succeeding, the business had to overcome obstacles in new markets (like the Apple Watch).

Implications for Consumers and Market Dynamics

Customers' confidence in upcoming AR/VR devices may be questioned as they observe Apple's pullback from the Vision Pro. However, trust may be restored if Apple can release a more affordable model that meets customer expectations. The VR sector is still competitive, with well-known businesses like Meta offering reasonably priced alternatives. Apple's next move will determine its position in this rapidly evolving market. Apple may gain essential lessons from the Vision Pro experience as it creates new products.

Vision Pro: Conclusion

Due to poor sales performance brought on by the Vision Pro headset's high price and limited mass-market appeal, Apple decided to discontinue it quietly. Even though this could seem like a setback, it might open the door for future AR/VR products that are more widely available. To regain traction in this competitive world, Apple must strike a balance between innovation and market realities as it turns its attention to creating a potentially cheaper headset.