Initial demand for Apple’s Vision Pro headset could wane, top analyst cautions

Key Points

• Vision Pro’s Rapid Sell-Out and Concerns About Demand: Apple’s Vision Pro virtual reality headset quickly sold out after preorders opened, with shipping times for all models extending to five to seven weeks. Ming-Chi Kuo, a top Apple analyst, estimated that Apple sold 160,000 to 180,000 Vision Pro units over the weekend. However, Kuo expressed concern as the extended shipping times remained unchanged 48 hours after preorders began. This raises a significant concern for Kuo that demand might taper off after the initial surge from core fans and heavy users.
• Comparison with iPhone Models and Production Forecast: Kuo highlighted a key difference in the demand pattern between Vision Pro and popular iPhone models. While both experience immediate sell-outs and increased shipping times upon pre-order, iPhone models usually continue to see a steady increase in shipping times in the 24 to 48 hours after pre-orders open, indicating sustained demand growth. Kuo also mentioned that, despite initial concerns, he believes it should not be challenging for Apple to ship 500,000 Vision Pro units in total this year, in contrast to his earlier forecast of 60,000 to 80,000 units for the product’s Feb. 2 release.
• Analysts’ Predictions and Market Perception: Analysts at Morgan Stanley predicted that Apple is likely to ship 300,000 to 400,000 units of the Vision Pro virtual reality headset in the current year, with potential upside based on initial sell-through feedback. While Wall Street analysts do not expect the $3,499 Vision Pro to provide a significant revenue boost for Apple immediately, they are closely monitoring the initial reception of this new product category to assess its potential in the future. Kuo emphasized that, as of now, the Vision Pro is still considered a niche product in the market. Despite these observations, Apple has not provided an immediate response to inquiries about the situation.