Appel’s Vision Pro supply chain shows one thing = niche product

March 7, 2024
2 minutes

Strategy | Business Models | Tech

Source: Macrumors.com

Ming-Chi Kuo (analyst) about the Appel’s Vision Pro supply chain:

1/ U.S. market demand
Initially, Vision Pro saw a significant demand spike with pre-orders selling out soon after the opening on January 19th. However, demand quickly plateaued, leading to an improved shipping time of 3-5 days by early March, indicating a slowdown.

2/ Shipping and sales forecast
Despite exceeding Apple’s original U.S. shipment estimates, rising from 150,000–200,000 units to 200,000–250,000 units for the year, Vision Pro is categorized as a niche product within the market.

3/ Global release strategy
Given the stagnant demand growth in the U.S., advancing the global release could be favorable, contingent upon the supply situation and necessary software modifications for regulatory compliance. The exact timing will hinge on Apple’s readiness.

4/ Supply chain dynamics
After a surge of interest from early adopters, Apple instructed suppliers to increase production from 500,000–600,000 units to 700,000–800,000 units this year. This expansion aims to cater to global demand and reduce shipping times post-global launch.

5/ The return rate for Vision Pro stands at less than 1%, with a notable portion attributed to setup difficulties faced by users. This suggests overall satisfaction but highlights a potential area for improvement in user experience.

6/ Future models speculation
Despite market speculation around new models with altered specs, my research indicates no official commencement on such projects by Apple. The focus seems to be on production efficiency and supply chain management for the near future, with significant spec changes unlikely before 2027.

7/ User feedback and development
Apple is actively collecting user feedback for Vision Pro’s product development roadmap. However, any substantial revisions to the current model’s specifications are not anticipated to enter mass production until 2027, reflecting a strategic focus on incremental improvements.

Vision Pro’s market impact remains limited, with 2024 shipment estimates adjusted to 650,000–700,000 units, up from an initial 500,000. The key factors for transitioning Vision Pro to a mass-market product include application diversity, pricing adjustments, and enhancements in wearing comfort. These elements are critical for its future success and broader market adoption. LINK

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