How Many Vision Pro Units Will Apple Sell This Year? History of Poor AR Headset Sales Suggests Below 250,000

Apple just unveiled the launch date of its Vision Pro "spatial reality" headset as February 2. And while I'm about as excited as Om Malik regarding its creative potential (at least as a niche product), I'd be skeptical of any broad proclamations we're sure to see, of 2024 being the year that unleashed a paradigm-shifting spatial reality era.

Why? The basic fact that an augmented/mixed reality headset device costing some $3500, even from Apple, will only attract the hardest of hardcore consumers/developers. My prediction from last month, that the Vision Pro will sell under 250,000 units in the first year, still sounds right -- and is actually on the optimistic side. 

Here's the track record for the category so far:

• Google Glass, retailing at $1500, only sold a reported 10,000 units its first year of launch in 2012.
• Microsoft HoloLens, first sold in a developer edition for $3000, only sold around 50,000 units in its first two years (2016/2017).
• The Magic Leap One Creator Edition, launched in 2018 for $2,295, only sold 6,000 units in its first 6 months. Notably, the startup expected to sell "at least" 1 million units in its first year. 

And these three fizzly launches happened despite the firepower of Google and Microsoft, and in Magic Leap's case, funding of $1.4 billion, with backing from Google, AT&T, and a who's who of Valley investors. I fully accept the premise that Apple will do a far, far better job at execution, creating a genuinely, magically appealing device. But even if that's the case, the high cost and historically low appeal of the form factor will still likely limit its first year sales. (And probably be a permanent barrier to mass market sales into the long term.)

Then again, based on reports from the Financial Times, Apple will only be able to actually produce some 400,000 units at launch. Longtime reader Martin K. believes this limited supply will paradoxically drive market interest:

That limited production capacity could (and I think will) lead to limited availability and that could/will trigger a couple of feed-back loops.

For example: limited availability could lead to perceived scarcity, which could lead to a perceived increased value, which could lead to increased demand, which could further limit availability.

And/or: limited availability in the US could lead to Apple postponing a launch in other countries, which could lead to many US sales that go into other countries, which could further limit availability in the US.

And/or: limited availability could increase second hand prices for the device, which could increase demand since more people will be willing to spend the money if they can be sure that they can sell the device second-hand for not much less than they paid if they don't want to keep it.

And of course, Apple won't like the limited production capacity. But apparently, they cannot avoid it this year. 

That sounds quite plausible! In any case, it's highly unlikely we'll see a Vision Pro install base reach seven figures in its first few years on the market, if at all. That would not necessarily be a failure -- especially if VisionPro becomes the replacement to the Mac Pro for professional developers. But we should be cautious about any Spatial Computing Era rhetoric unless and until Vision Pro sales reach the millions and then tens of millions of units.

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Comments

[Gwyneth Llewelyn]

Heh. Well, well. After watching Apple's original announcement, I thought that, this time, Apple really went insane — nobody wants that kind of device.

But after talking to a few people casually about the product — most of them not really Apple die-hard fans (who of course will buy anything Apple throws at them) but who own an iPhone or two — it looks like their calculations go this way:

A big, huge plasma screen for 8K will cost you US$7,000. Sooner or later, they will have to buy that.

Apple Vision Pro costs half that, and you can take it anywhere you like — and grow the screen as much as you want, without wasting wall space. So, you can buy two Apple Vision Pros for the price of a huge plasma screen. And you can play them as loud as you wish without affecting anyone around you.

Suddenly, Apple's techno-gadget starts to become interesting.

Naturally enough, for those among us who don't need a 8K plasma screen (/me points at self), because, well, we just happen to enjoy other things beyond TV, Apple's Vision Pro is hopelessly overpriced, and even with upcoming competition and new releases, it's very unlikely that Apple's price will go down much. So, it's completely out of my radar, and that will most certainly be true for a vast proportion of the humans inhabiting this planet :)

But Apple also knows it's a question of time. In ten years, who knows what will happen? Think about the Apple Watch: probably not Apple's 'best' product, and it didn't trigger a paradigm shift (for many reasons); but it's still around, still getting upgrades, still getting new releases, still getting new software to integrate it with iPhones, iPads... and now perhaps with the Vision Pro? Who can say?

It has been promoted very effectively, though. This is not a "gamer's VR goggle set". It's something completely different, even if essentially works in the same way. But that's not the kind of users that Apple wants to attract; nobody plays games or uses AR/VR on Apple platforms (disclaimer: I know that statement is not true, but that's the media's perception of the truth, and that's what Apple has to deal with). What they do instead is communication and entertainment (from watching videos to posting stickers with cats on social media), and that's where Apple (mostly) wants to sell their product. Look how different Apple's promotional videos are from, say, the old video ads for the Oculus Quest 2, which is clearly a product being sold to the gamer community. Apple is targeting their own product completely differently.

To summarise: no, I'm not holding my breath. I also don't think we'll see seven-figure sales in just a year or two (as predicted by Apple). But I believe it won't be as bad as we think (it won't be as bad as the Apple Newton!), and the product might actually become more relevant in the long tail — by the 2030s or so. But by then Apple will already be a solid player in the market, and their technology will be stable and mature. Then they'll reap the real rewards.

[Martin K.]

> This is not a "gamer's VR goggle set". It's something completely different, even if essentially works in the same way. [...] What they do instead is [...] entertainment [...]

Spot on! Turns out that there have been other products in the category of "VR goggles for consuming media", for example Oculus Go. How many sold? About 2 millions in the first year according to Wikipedia. Which tells me that there is lots of interest in such devices. But how many will be willing to afford a Vision Pro? We will see in just a few weeks!

Also: Apple's new ad for the Vision Pro is perfect in multiple ways. Anyone who has any doubt about what most users will do for most of the time with their Vision Pro should watch that ad. (Hint: forget about games, forget about productivity, forget about conferencing, just consider what most of the ad actually shows.)

[camilia fid3lis nee Patchouli Woollahra]

Pricing was one of the things Samsung and Google Cardboard got right: The Samsung S6/7/8 bundled with a Gear VR headset cost under $1200, and for many people, that price further plunged to $148 for the headset and controller because they already had a compatible Samsung phone on the cheap from their choice of mobile provider as part of a plan.

On the ghetto side, Cardboard potentially cost only the cost of postage to ship a DIY cardboard adapter (if you didn't know how to print and setup your own cardboard cutting) or maybe a little extra for a boutique option crafted for you by a third party for more comfort, style and/or sturdiness.

Net result? Samsung sold 5 million units of the Gear VR in several editions throughout its lifespan, and Google Cardboard shipped an equal number of kits through its officially supported life. Even this number is a little fuzzy as the Cardboard echosystem had many components released as opensource, allowing the continued use of the standard by other parties even in 2021, long after Cardboard is no longer supported officially.

The numbers companies such as Meta, Apple or MagicLeap want will not come from selling a boontoggle that costs as much as a high-end PC for a activity they may potentially find not to their liking. The release of a cheap option at far less is a must, even if it requires serious nerfage of onboard I/O capabilities, or tethering to some smartphone for computing power. It's easier to buy, try, then let go of a $200 headset if you find XR's not for you, than if it costs $2000.

[Luther Weymann]

This is a good question: "How Many Vision Pro Units Will Apple Sell This Year?

This is a better question: In two years, will it be 85% or 95% of Vision Pro headsets that are in boxes either in the garage or in the back of a closet?

[Martin K.]

> This is a better question: In two years, will it be 85% or 95% of Vision Pro headsets that are in boxes either in the garage or in the back of a closet?

The answer will depend on whether Apple is going to include Vision Pro in their trade-in program. So, another question might be: what will the second-hand/refurbished market for Vision Pros look like in two years?