Apple’s Vision Ramp
How will Vision Pro scale?
To me, the most interesting element of this FT story about the production plans for Apple’s Vision Pro is a single chart midway through.
Sure, it’s headline-grabbing that Apple may not only be able to hit their (rumored) 1 million unit (internal) goal in the new headset in 2024 but that the number may be more than cut in half, to under 400,000 (if two people close to Apple and Luxshare, the Chinese contract manufacturer that will initially assemble the device, are to be believed). Even worse would be “130,000 to 150,000 units in the first year”, as “two China-based sole suppliers of certain components for the Vision Pro” said that Apple was only asking them for components at a scale that would imply that number. The problem is that all such extrapolations and predictions are almost always wrong. Because it’s one big game of TELEPHONE when it comes to such sources.
Still, it’s at least directionally interesting that Apple may have real downward pressure on the number of Vision Pros they can ship in the first year. Not from demand (which is still not known), but from supply. Again, potentially. We’ll see. But this chart alone in the piece is worth looking at:
Again, forget the absolute numbers, and just focus on the guesstimated trend line.¹ This would imply that the Vision Pro is going to be more akin to the MacBook rather than any of the ‘i” devices (or Apple Watch), at least when it comes to sales. And actually, slower out of the gate, but getting on par with Apple’s flagship computer by Year 4. Certainly a $3,500 starting price point will do that to some degree to demand. But what else is going on here?
Well, for one thing, this is only (presumably) the Vision Pro, not including a non ‘Pro’ model — which would almost certainly be available by Year 5 in the chart, if not much sooner. The iPhone, iPad, iPod, Apple Watch, and even MacBook all have multiple SKUs under the product umbrellas counted above. This chart is likely incomplete at best, and misleading at worst. It would be akin to only looking at the most expensive model of any of the other devices listed.
Still, it remains interesting to look at this chart with regard to inflection points. The iPod had one in Year 3. The Apple Watch in Year 4. The iPhone in Year 3 — and then another one in Year 4. The iPad had one right out of the gate — and then slowed down quite a bit in the latter years as a result. The MacBook has been slow and steady, with no real inflection point (at least relative to these other product lines). This model has a small bump for the Vision Pro in Year 3 (maybe that’s taking into account a second SKU or lower-price or lower priced model?). But again, it’s more MacBook-like.
It would be interesting in Year 5 if the Vision Pro is tracking around the MacBook historically. Would that be viewed as a success for Apple? It depends on a number of fronts, but certainly not if they’re actually not making a healthy margin (or perhaps any margin at all!) on the device.
So, to the actual point of the FT piece, it would seem like Apple needs to get the supply chain for the ‘Vision’ line of products in line, fast.
¹ Obviously, if you’re taking the current first year estimates with a grain of salt, take the 5-year extrapolations with a whole jar of it. No one knows. Not even Apple. Especially for a device like this (new market, high price point, etc). But if component supply and build issues are the key constraint in the early years — again, Apple will need to get on top of that (and will).
