Vision Pro Update

Demand in the U.S. market has slowed down significantly:
1. Vision Pro shipping time has now improved to 3–5 days (early March).
2. The shipping time after pre-orders opened on 19 January was in early March, meaning that although Vision Pro sold out after pre-orders opened due to early adopters buying it, demand for the device declined rapidly and has stayed the same. It confirms the conclusion of my previous survey (read more in “Vision Pro’s first-weekend pre-order review: expectations met, but concerns raised”).
3. Unless Apple cuts the price of Vision Pro or there are more attractive applications, the shipment growth in the U.S. market may be limited.
4. U.S. shipments are expected to be 200,000–250,000 units this year, better than Apple’s original estimate of 150,000–200,000 units, but this is still a niche market.
Global release forecast:
1. Due to the limited demand growth in the U.S. market, advancing the global release schedule is favorable when the supply improves. The actual release time will depend on Apple’s software modification schedule to comply with other countries’ regulations.
2. I still maintain my prediction that Apple may launch Vision Pro in more countries before WWDC this year.
Supply chain production expansion:
1. In the past month, several small-capacity suppliers have expanded production from 500,000–600,000 units to 700,000–800,000 units this year. However, this is still a niche product.
2. In addition to better-than-expected demand from early adopters in the U.S. market, another key reason for Apple to ask suppliers to expand production is to reduce shipping time after the global launch.
3. It is important to note that production capacity usually differs from shipments. For example, the iPhone’s current assembly capacity is 250–300 million units per year, but the actual shipments are much lower.
Return rate:
1. According to my survey of the repair/refurbishment production line, the current return rate for Vision Pro is less than 1%, with no anomalies.
2. It is worth noting that 20–30% of the returns are due to users not knowing how to set up Vision Pro.
New model prediction:
1. The market generally expects Apple to release a lower-priced version with downgraded specs (e.g., reduced number of cameras, removal of EyeSight, etc.) and a new model with upgraded specs. However, my latest survey indicates that Apple has not officially started either project.
2. Apple’s new Vision Pro project is expected to go into mass production in 4Q25–1Q26, with Hon Hai receiving the new product introduction (NPI). The new project focuses on improving the efficiency of production and supply chain management rather than changing specs. The new project may reduce costs, and the latest plan shows limited changes to product specs, so it is estimated that the user experience will not differ from the current model.
3. Apple is already collecting user feedback for the Vision Pro product roadmap. It is currently estimated that new models with significant changes to the Vision Pro specification may not be in mass production until 2027.
Investment strategy:
1. Everything about Vision Pro since pre-order has been in line with previous expectations, with only the higher-than-expected number of early adopters and the production expansion by suppliers exceeding expectations. However, Vision Pro is still a niche product based on current demand and production levels (2024 shipment estimation up to 650,000–700,000 units vs. 500,000 units previously).
2. For Apple and most suppliers, the Vision Pro investment theme still has a limited impact on the share price.
3. The three critical factors in moving Vision Pro from a niche to a mass-market product are applications, price, and headwear comfort. Improvements/changes in these three critical factors will be important to watch.