Three months after the Vision Pro mixed reality headset went on sale, Apple’s first new hardware device in years may already be facing headwinds.
Ming-Chi Kuo, an Apple analyst with connections in the Asian supply chain, wrote on Tuesday that his channel checks on component makers show the tech giant is sharply tempering its expectations and now expects to sell between 400,000 and 450,000 units this year.
“Demand in the US market has fallen sharply beyond expectations,” he wrote Mediumadding that the market consensus was between 700,000 and 800,000.
Since Apple does not publish a forecast for Vision Pro sales and has not responded to a forecast Fortune request for comment, it is difficult to verify his claims.
However, the viral excitement surrounding Vision Pro’s launch in early February and the claim that it would usher in a “new era of spatial computing” has dampened considerably.
First time trying Vision Pro: damn this screen is amazing and the eye tracking is like magic and this feels very future and it’s also a bit heavy
Second time: the immersion factor is still as high. Special videos are hit and miss, you have to get the spacing right. And wow this… https://t.co/iqSvs1e8LD
— Marques Brownlee (@MKBHD) January 16, 2024
Garry Tan, CEO of Silicon Valley’s best-known startup accelerator Y Combinator, posted on Wednesday about his frustration with using Vision Pro while at work.
“Is this actually dog food for people at Apple?” He wroteusing a tech industry term for developers who test their own products.
If Apple loses a technology expert like Tan, “things aren’t going well,” to use his words.
The XR space has struggled to gain mainstream appeal
The field of Extended Reality (XR), an umbrella term that encompasses all forms of the technology including MR and VR, has struggled to carve out a niche for itself beyond its very first adopters.
The gain headsets provided were not enough for mainstream buyers to justify the high initial cost of purchasing a Sony PlayStation VR or Meta Quest.
While interest was low, third-party developers were often hesitant to invest additional resources in designing even ported applications and software, let alone custom applications that would fully utilize the hardware’s capabilities.
And as long as there wasn’t compelling content they couldn’t already find elsewhere, consumers had little reason to worry.
Demand for the Quest, previously sold under the Oculus brand, was so tepid compared to the $45 billion in accumulated Metaverse losses that Meta boss Mark Zuckerberg decided to license its operating software to other headset makers to fuel the growth of the overall XR stimulate the ecosystem.
It was hoped that Apple, with its instant brand recognition and enormous market influence, would end the chicken-and-egg dilemma that has long handicapped the industry.
This is crazy:
The number of new Vision Pro apps has plummeted…We always talk about the “chicken or the egg” problem for XR apps and hardware…
…it doesn’t appear that the AVP v1 (aka dev kit) has fueled the XR app ecosystem as we had hoped pic.twitter.com/4JpHE56aEz
— Troy Kirwin (@tkexpress11) April 17, 2024
But the device has been criticized for being excessively expensive and uncomfortable; YouTube reviewer Marques Brownlee emphasized three times how tough it is.
In a worrying sign that Apple hasn’t yet managed to convince people that developing tools for their headset is worth it, data indicates that the number of new releases for Vision Pro apps is also steadily declining.
“The challenge for Vision Pro is to address the lack of key applications, price and headset comfort without sacrificing the transparent user experience,” warned Apple analyst Kuo.
However, there was also positive news.
Even as Meta predicted on Wednesday that annual operating losses in its Reality Labs segment would increase “meaningfully” year-on-year as it continues to invest, it said the division’s revenue rose by almost a third thanks to sales of Quest -headsets.