Tech analyst Ming-Chi Kuo recently shared noteworthy insights from the first pre-order weekend review of Apple Inc.’s AAPL Vision Pro, the company’s first mixed-reality headset.
What Happened: Kuo, an analyst at TF International Securities, late Sunday evening shared his review saying "Based on pre-order inventory and shipping time, I estimated that Apple sold 160,000 to 180,000 Vision Pro units during the first pre-order weekend."
He went on to say that as per the predictions, the headset sold out "immediately after pre-order opened" causing shipping times for all models to stretch to five to seven weeks within a matter of hours.
However, while the immediate sell-out and extended shipping times initially appeared favorable, "a key concern emerged."
"Shipping times remained unchanged 48 hours after pre-orders opened. It indicates that demand may quickly taper off after the core fans and heavy users place their orders," he said.
According to Kuo, in contrast to the Vision Pro, popular iPhone models swiftly go out of stock during pre-orders, causing shipping times to commonly extend to several weeks within a few hours.
But, unlike the Vision Pro, iPhone models consistently witness a gradual rise in shipping times 24 to 48 hours after pre-orders commence, "indicating that demand continues to grow even after the initial sold-out."
"Media reports have suggested that supply chain partners such as assembler Luxshare will work overtime during the Lunar New Year to meet demand, meaning better than expected demand for Vision Pro," Kuo stated, adding, "However, the reality is that because there is still room for improvement in Vision Pro production efficiency, Luxshare has been working full-time overtime since the start of mass production to offset the impact of production efficiency on shipments."
In conclusion, Kuo said that while attaining a shipment volume of 500,000 units for the Vision Pro this year should pose no significant challenge.
Nevertheless, "because demand tapers off quickly after the initial sold-out, it's critical to closely monitor demand in other markets and application updates to assess changes in demand."
Considering Apple’s vast user base exceeding 1.2 billion active users, even if a modest 0.007% of users express interest in purchasing after pre-ordering, the Vision Pro has the potential to sell out upon opening for pre-orders, Kuo noted.
Why It's Important: The Vision Pro headset is scheduled for launch on Feb. 2.
Previously in September last year, Kuo stated "Based on some component suppliers' maximum production capacity estimates, Vision Pro shipments in 2024 will be at most 400,000–600,000 units, which is less than the market expectation of more than 1 million units."
It is important to note that the device's price of $3,499 falls on the higher end of the cost spectrum. However, this hasn't diminished the excitement surrounding the headset among both tech enthusiasts and investors.
Previously, it was reported that the Cupertino, California-based tech giant may prioritize its wearable business, including the Vision Pro, over its flagship and most successful product, the iPhone in 2024.
However, the price of Vision Pro raised concerns about how much the product will be able to increase Apple's revenue although Deepwater Asset Management managing partner Gene Munster had said that eventually, 10% of Apple's revenue would come from Vision Pro.
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