Apple Vision Pro shipments reportedly cut as US demand for headset wanes
Ming-Chi Kuo says Apple has reduced its orders for Apple Vision Pro parts and assemblies, with the cut in shipments said to indicate lower demand for Apple's headset than previously thought.
Apple Vision Pro
The launch of the Apple Vision Pro in the United States was a success, with shipment estimates in February being far better than Apple's original estimate. However, months later, it seems Apple is preparing for considerably lower consumer demand as it moves into international sales.
According to TF Securities analyst Ming-Chi Kuo on Tuesday, Apple has cut its shipment orders for the Apple Vision Pro in 2024 down to between 400,000 and 450,000 units. This is said to be far below the market consensus for shipments at 700,000 to 800,000 units.
Although, "market consensus" is never an indicator of what Apple's plans actually are. It's probable that Kuo is seeing disturbances in the supply chain, but it is almost always better to over-estimate demand than fall short. Fall iPhone shortages are the best example of not enough on hand causing a problem.
Kuo's latest supply chain survey indicates that Apple's decision to cut orders before launching the headset in other countries means US demand has "fallen sharply beyond expectations." This drop in demand has, in theory, prompted Apple to be more conservative in its expectations for non-US market sales.
Apple is currently in the process of preparing the Apple Vision Pro for launch in international markets, with China expected to receive the device as part of the first wave of expansion.
Apple is also reportedly making changes to its product roadmap for headsets, in view of demand changes. It is now theorized that the next iteration of the Apple Vision Pro may not arrive in 2025 after all.
The forecast for the next Apple Vision product has been hazy, though, and Kuo's forecast may not be a shift at all. Time will ultimately tell on that.
It is also claimed in the report that Apple expects shipments of the Apple Vision Pro to decline year-on-year in 2025. This appears to be mostly speculation as well.
Kuo's track record is generally excellent. For over a decade, though, supply chain reporting has indicated "order cuts" in everything Apple ships, a few months after release, and to date, the company does not seem to be dramatically impacted.
In January, it was estimated that Apple had sold 200,000 Apple Vision Pro units, reportedly more than expected. Return rates still approximate the non-Pro iPhone return rate.
Read on AppleInsider
Comments
Very "un-Apple" product without headset comfort.
Maybe, it would be a good device after some generations. Maybe not.
With that said, even if the VISION PRO was cheaper and lighter, I personally think there's a fundamental marketing issue that puts a bad taste in my mouth.
One of the biggest features Apple has touted to differentiate the VISION PRO from competition products is the image of your eyes on front. That feature is there to make you and others feel less isolated. That's a key differentiator if indeed it works. In all photos of VISION PRO that Apple has shown us, the simulated eyes of the wearer are CLEARLY SEEN. And that looks fantastic! But! In all the videos and reviews I've seen of people wearing the actual VISION PRO device, it's pretty much impossible to see the simulated eyes. And despite my absolute and unbreakable love for Apple, I am saddened to say that is really a case of false advertising here. No, I don't believe they should be sued over it because Americans have brain rot from suing so much. I hate lawsuits of any kind because of it! But at the same time, you cannot define "False Advertising" in other way.
So I for one am not inclined to buy the VISION PRO for that reason alone. And I do think it is a good enough reason. Your mileage may vary.
In a new Medium post, analyst Ming-Chi Kuo says U.S. shipments of the Apple Vision Pro are expected to be 200,000–250,000 units this year, better than Apple’s original estimate of 150,000–200,000 units.
And: During the year, Kuo expects Apple to move up to 500,000 units (worldwide)
And here's Ming-Chi Kuo #2 just six weeks later:
Apple has cut its shipment orders for the Apple Vision Pro in 2024 down to between 400,000 and 450,000 units. This is said to be far below the market consensus for shipments at 700,000 to 800,000 units.
So which Ming do you believe? The Ming who only expected "up to" 500K sales--so that number was his theoretical ceiling on sales, not the number he predicted they necessarily would hit. Or the Ming who six weeks later thinks that 400K-450K sales represents a sharp drop in demand? (Even though he has no insight that would allow him to accurately make either prediction.) So let's dissect this, shall we?
This is the typical straw man bullshite that always powers the latest Apple Is Doomed news. "Analysts" throw out a shipping estimate that Apple NEVER said it was going to hit and then start shouting that the sky is falling when Apple fails to hit the totally baseless estimate. As for "market consensus" -- that's hilarious! A month after Vision Pro debuted last June, Wedbush estimated 2024 global sales at 150K units. Ming-Chi Kuo chimed in with 500K. Morgan Stanley pegged it at 850K units. And Goldman Sachs estimated... wait for it... 5 MILLION units. How much of an idiot do you have to be to predict 5 million units sold in the first year for a $3500 v1.0 product that offers an all new computing platform that Apple itself said would be a niche product in early sales? That would be more than three times the sales of the original iPhone! Point is: there is NO market consensus... estimates are wildly all over the map. No one knows anything. And averaging them all out is just another form of nonsense.
Meanwhile... the Financial Times of London ran this report last July:
Two people close to Apple and Luxshare, the Chinese contract manufacturer that will initially assemble the device, said it was preparing to make fewer than 400,000 units in 2024. Multiple industry sources said Luxshare was currently Apple’s only assembler of the device. Separately, two China-based sole suppliers of certain components for the Vision Pro said Apple was only asking them for enough for 130,000 to 150,000 units in the first year.
Interestingly, this wasn't a sales prediction, per se--the "fewer than 400K units" estimate was being driven by the complexity of Vision Pro production. That was the ceiling on the number of Vision Pro units that could be successfully manufactured in a year. So, to summarize: the estimated limit from last July on how many units could actually be manufactured in 2024 has now been repurposed by the tech press as a disaster for Vision Pro demand, which we know must be true because it's not hitting "market consensus" numbers, never mind that analysts have wildly divergent forecasts of what that number should be, from 150K to 5 million. But who cares when all you need to know is that Apple is doomed!
The cherry on top: I cannot source any estimate of Vision Pro sales for 2024 from Apple, itself. If anyone finds a quote from an Apple exec with estimated unit sales for 2024, please post it--but I can't find anything. So ALL of this is nonsense built on a foundation of nonsense.
What is required for international distribution that requires ramp-up?
Surely, they could ship to all English-speaking markets and send the right plug separately if they had a mythical oversupply.
At the end of that ramp up Apple will not be the largest maker of AR/VR headsets but they will be the most profitable software/hardware headset maker in the world and the EU will trumpet/declare Apple to be with only 15%-25% of the market to be a monopoly of itself.
Old enough to know that a 3500 dollar device can come overnight like anything else. I dunno if you understand how deliveries work but typically with something this expensive, it's a good idea to know that you can be there to receive it. Most people, save a few uneducated who have "schedules", are salaried and their work day to day varies.. deliveries overnight give you much better control of when you can be at home.
But sure, don't think it through... why should you be any different than most of the people on the internet.
The entire tech media yesterday spewed forth basically the same thing. No important analysis like you presented at all. This basically proves that the media can mislead as well as inform. Misinformation can impact stock prices, and much more. Scary stuff.
One final thing that I didn't note in yesterday's post: if you believe what Kuo and other analysts were saying back in February (not that you should, but...) Apple was close to hitting its U.S. sales goal for ALL OF 2024 based on the pre-order backlog alone. It's now just 12 weeks since the first Vision Pro delivered in the U.S. and Apple has yet to even launch it anywhere else... so how the hell could Apple be "missing estimates" when it was supposedly close to hitting its U.S. sales goal back in Feb and we have zero data for the rest of the world which is still waiting for launch? Could anyone other than the idiotic, Apple-bashing tech press be surprised that U.S. demand slowed, maybe even sharply, after the initial rush of first adopters got their orders in? Especially if you've almost hit your annual sales goal just on pre-orders. smh.
Apple Vision Pro vs Army IVAS headset
I cannot see Apple discontinuing the product even with slow sales since it's clearly a future mass market device despite the niche status of VR headsets today. If you really think about it, if the major flaws of its device having nothing to do with how it functions as a VR headset and it blows away the competition.