Earlier this week, Apple headset analyst Ming-Chi Kuo noted that production would be cut to 400,000 or 450,000 units, compared to a previous market consensus of over 700,000. This happened according to a corresponding report by Bloomberg’s Mark Gurman said in his article that demand for Vision Pro demos has “declined sharply,” while sales have dropped significantly in some locations.
Naturally, this caused a lot of panic and hand-wringing among Apple enthusiasts, who feared that the headset that was supposed to change VR forever might not have the staying power they expected. However, before anyone else starts reaching for pearls, I want to let you in on a secret: It doesn’t actually matter how many headsets Apple sells.
First, let’s talk about the production numbers. Is it 400,000 or 800,000 or something in between? Back in January, the same Ming-Chi Kuo estimated that the company sold between 160,000 and 180,000 units in the fiscal year, an increase compared to the previous year from around 60,000 to 80,000. But if we go even further back to last July, it will cited two people who said Apple only required its supplier to produce fewer than 400,000 units in 2024, while other sources put that number closer to 150,000. Of course, the numbers may change over time as Apple responds to feedback and interest from developers and the public. Regardless, trying to predict the exact number of devices that will be manufactured is extremely difficult, especially for an attention-grabbing and innovative product that has been rumored for as long as (and according to some even before) the market.
Still, let’s take the number 400,000 and see how far it goes. Without taking accessories into account (some of which are very important, especially if the owner wears glasses), the Vision Pro costs $3,500. A rough napkin calculation suggests that Apple is expecting sales of around $1.4 billion. That’s a pretty big number and would be a record year for many other companies. But this is Apple we’re talking about – it has . And that was considered a bad year. So we’re talking less than one percent of the company’s total revenue, which is essentially a rounding error for Apple’s finances.
That number looks even less impressive when you consider all the research and development that went into making the Vision Pro. Apple is always reticent when it comes to disclosing how much money it invests in various departments. But if we look at Meta, another major player in the VR space, we can get a better sense of what Apple’s VR budget might look like. Accordingly Business Insiderbased on an analysis of regulatory findings, since the beginning of 2019. That’s a serious change and more than enough to cause some consternation among Meta stock investors
But all these numbers are just noise. Analysts like to look at these things to predict company growth, although they are so busy focusing on quarterly numbers that they often miss the bigger picture. Depending on who you ask, Apple has more than any other company in the world and has more than $165 billion in a bank somewhere. And given recent reports claiming that Apple has done this, I would argue that the company may want to double down on its headset efforts.
Because the Vision Pro could be the first step towards a platform that could reshape the company’s entire evolution, just as the original iPhone did in 2007. From the start, it was clear that Apple’s first mobile phone would have a huge impact. But looking back, they never mention the iPhone’s first year of sales, which was only around 1.4 million units. Sure, that’s more than 400,000, but that was also for a significantly cheaper device and a drop in the ocean compared to the HUNDREDS of millions Apple has sold recently. These numbers were meaningless.
The Vision Pro is from Apple Field of dreams Device for virtual reality, spatial computing or whatever you want to call the category that includes head-mounted displays. Apple had to build it so that developers would have real hardware on which to test software. Apple had to build it so that there would be a platform for people to download apps from. (If you recall, the original App Store didn’t launch until July 2008, more than a year after the original iPhone went on sale and fetched an estimated price alone.) Apple had to build it to make a statement, so that they don’t give in. The first mover advantage goes entirely to Meta or someone else.
While I would assume the Vision Pro is a glorified development kit (it was announced at WWDC, after all), there are features that evoke the magical feeling I had the first time I used an iPhone. The Vision Pro has perhaps the best optics I’ve ever seen on a headset, including the Enterprise models, which cost well over $3,500. It also has the best eye tracking I’ve ever experienced and makes navigating menus and apps incredibly intuitive. It just somehow works. And slowly but surely things are getting better, as my colleague Devindra recently noted in his report
But just like Apple’s first phone, the Vision Pro isn’t without its problems. It’s heavy and not particularly comfortable for long sessions. Its wired battery isn’t the most elegant power solution. Its front screen is prone to cracking, typing still feels clunky, and there aren’t enough bespoke apps to make it an essential part of your everyday tech kit. But these are fixable problems, and there’s clearly something there, a foundation, for Apple to iterate on. Even in its infancy, the Vision Pro offers enough to convince hundreds of thousands of people (or developers) to buy a device that makes little practical sense.
The focus should be on what upgrades or additions Apple may make in the future, not how many units it produces (or not). So don’t let analysts or other noisemakers convince you otherwise.
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