Apple is reportedly reducing the production target for its highly anticipated AR/VR device, the Vision Pro. According to sources close to the matter, Apple plans to scale back production to 400,000 units, well below the initial target of one million units.

There are several factors contributing to this decision. First, the COVID-19 pandemic has impacted the global production of electronics, and although restrictions are easing, manufacturing is still recovering. Apple is working with Chinese company Luxshare to manufacture the Vision Pro, and their production capabilities may be affected by these circumstances.

Furthermore, the estimates of how many units the Vision Pro will sell vary widely. While Webdush predicted only 150,000 units in the first year, Morgan Stanley predicted over 850,000, and Goldman Sachs projected 5 million units by 2024. The uncertainty around sales figures reflects both the comparison to the original iPhone and skepticism about the device’s appeal, especially considering its high price tag of $3.5k.

Despite the reduced production target, Apple’s decision can be seen as a strategic move. Setting a lower initial production run allows Apple to manage potential supply chain pressures and ensures a significant number of units are still available to customers. The company may be anticipating a gradual increase in demand over time.

However, critics may interpret the scaled-back production as a sign of Apple’s lack of confidence in the Vision Pro’s success. Nevertheless, it is rumored that Apple’s concern over the quality of the micro-OLED displays used in the device is another contributing factor to the reduction. Given the Vision Pro’s advanced features and high price, Apple wants to ensure the product meets the highest standards.

It is important to consider the historical context of Apple’s product launches. When the iPhone debuted in 2007, it sold only 1.9 million units in its first year—a significantly lower number compared to competitors like Samsung and LG. Drawing comparisons between the iPhone and the Vision Pro, it is crucial to recognize the distinct differences in scope and function. The Vision Pro offers more functionality beyond gaming and creative applications, but it may appeal to a narrower market.

While plans for a lower-cost version of the Vision Pro have been postponed, there is a possibility of a price drop in the future. However, this may not occur for some time. It is evident that Apple is focused on ensuring the device’s quality and optimizing the initial production run rather than prioritizing large volumes of potentially flawed units. The Vision Pro’s success may depend on Apple’s ability to demonstrate its value beyond other AR/VR headsets.