AVP price is insane compared to similar Mac hardware

[danwells]

A Mac mini with the exact same CPU, GPU, RAM and storage as the Vision Pro is $799! A Mac mini doesn't really contain a lot beyond the basic processing hardware (a featureless case, a small power supply, some ports), so we can call the Vision Pro's computer roughly $749 at retail, then the rest goes to the R1 chip, displays, cameras, motion sensing, etc.

\If you spent the same $3499 the Vision Pro costs on a Mac, your best option might be a MacBook Pro M3 Max with 16 CPU cores (12 of them performance cores), 40 GPU cores,48 GB of RAM and 1 TB of storage. That's 3x+ CPU performance, 4x+ GPU, 3x RAM and 4x storage!

Is the ancillary hardware on the Vision Pro really that expensive, or is Apple trying to recoup a ton of R&D costs on the relatively small number of initial units? The R1 is a custom coprocessor, which may be expensive given the relatively short initial run. It's probably not a hugely complex chip, but they aren't making that many of them either, and it has fast I/O, which probably means it's on a fairly modern process node.

The displays ARE expensive (one estimate I found suggests they cost a couple of hundred dollars each, plus a lesser sum for the external display). The same source (a website called Mixed-News) suggests that the Vision Pro costs about $1500 to manufacture, leaving $2000 or so as profit - a 57% margin! Nice work if you can get it...

The higher storage capacities have even higher margins - Apple is, as usual, overcharging for storage. A 1 TB PCIe 4.0 drive retails for between $50 and $100 (and that isn't parts cost, that already has the margin built in - right off Newegg's website, quantity 1). A superfast PCIe 5.0 drive retails around $200. Even if Apple's using the fastest possible storage (which they could be - they like fast storage), they're marking it up 100%+ (the plus is the cost of the 256 GB drive they delete to put in the 1 TB) over retail at Newegg.

 

[Sheepish-Lord]

You’re also forgetting logistics and manufacturing costs. Additionally, you can’t compare two different types or hardware, it simply doesn’t make sense.

Bottom line, things are only worth what people will pay for them and right now that’s $3500 USD.

 

[fwmireault]

There's no denial that AVP is an expensive product. That said, I think that you are comparing apples (no pun intended) to oranges. There are a lot of sensors, cameras, and newer tech in a VR headset compared to mature products such as laptops. Also, the MBP is meant to be more of a mass-market product than the niche VR market (for now at least), so Apple is probably more willing to eat on their margins with laptops than with Vision Pro. Of course a MBP will always win on paper, but the experience is also very different.

 

[4sallypat]

You’re also forgetting logistics and manufacturing costs. Additionally, you can’t compare two different types or hardware, it simply doesn’t make sense.

Bottom line, things are only worth what people will pay for them and right now that’s $3500 USD.

Not only that - Mac OS, iOS and Vision OS - can't compare as they are different platforms.

Get a Mac Pro M2 for $10,000 and then realize no display is included !

 

[davvid97]

To the Mac mini price you should add Apple Display price (1599) or even Pro Display XDR (4999) as this one actually support HDR and displays truer blacks 😉

 

[tacoshell]

Add in two 4K micro-OLED screens. What’s the price on those?

 

[Chuckeee]

Not only that - Mac OS, iOS and Vision OS - can't compare as they are different platforms.

Get a Mac Pro M2 for $10,000 and then realize no display is included !

But you can grate you own cheese 😜

 

[Abazigal]

It’s a $2k Apple laptop or high-spec iPad Pro, with an integrated state-of-the-art VR/AR headset and sensor array (that make similar devices look like crap). $3.5K does not seem like a crazy price for all that, honestly.

 

[jz0309]

A Mac mini with the exact same CPU, GPU, RAM and storage as the Vision Pro is $799! A Mac mini doesn't really contain a lot beyond the basic processing hardware (a featureless case, a small power supply, some ports), so we can call the Vision Pro's computer roughly $749 at retail, then the rest goes to the R1 chip, displays, cameras, motion sensing, etc.

\If you spent the same $3499 the Vision Pro costs on a Mac, your best option might be a MacBook Pro M3 Max with 16 CPU cores (12 of them performance cores), 40 GPU cores,48 GB of RAM and 1 TB of storage. That's 3x+ CPU performance, 4x+ GPU, 3x RAM and 4x storage!

Is the ancillary hardware on the Vision Pro really that expensive, or is Apple trying to recoup a ton of R&D costs on the relatively small number of initial units? The R1 is a custom coprocessor, which may be expensive given the relatively short initial run. It's probably not a hugely complex chip, but they aren't making that many of them either, and it has fast I/O, which probably means it's on a fairly modern process node.

The displays ARE expensive (one estimate I found suggests they cost a couple of hundred dollars each, plus a lesser sum for the external display). The same source (a website called Mixed-News) suggests that the Vision Pro costs about $1500 to manufacture, leaving $2000 or so as profit - a 57% margin! Nice work if you can get it...

The higher storage capacities have even higher margins - Apple is, as usual, overcharging for storage. A 1 TB PCIe 4.0 drive retails for between $50 and $100 (and that isn't parts cost, that already has the margin built in - right off Newegg's website, quantity 1). A superfast PCIe 5.0 drive retails around $200. Even if Apple's using the fastest possible storage (which they could be - they like fast storage), they're marking it up 100%+ (the plus is the cost of the 256 GB drive they delete to put in the 1 TB) over retail at Newegg.

Comparing the VPro to a Mac is like comparing apples to oranges… but to stick with your comparison:
which Mac has 12 cameras? Eye tracking? Curved PCBs? Curved chassis? 2 4.3k monitors?
Macs in any form factor have been built for 30+ years, it’s simple technology-wise.
The VPro has technology that doesn’t exist elsewhere, and multiple “weird” form factors which makes building them a challenge.

 

[jz0309]

But you can grate you own cheese 😜

Yea, but only the rough grade, I prefer the old one which could fine grate

 

[danwells]

It’s a $2k Apple laptop or high-spec iPad Pro, with an integrated state-of-the-art VR/AR headset and sensor array (that make similar devices look like crap). $3.5K does not seem like a crazy price for all that, honestly.

It's actually a $1249 Apple laptop (AppleInsider Price Guide for a 13" MacBook Air with the M2 with 8 core CPU and 10-core GPU, 16 GB RAM, 256 GB storage. It's a bit more hardware than a $849 iPad Pro, since the iPad uses a slightly cut-down M2 and the Vision Pro uses a full-on version. The iPad also only has 8 GB of RAM until you get to the high-storage models...

Yes, there are some odd PCBs in the Vision Pro, and there's some significant money in the displays... Apart from 3D, the two displays together are (probably) relatively similar to a good 95%DCI 4K display. That's probably a $600 display.

If it's THAT expensive to build the hardware into the form factor (and it may be), how big is the market going to be? M2 MacBook Air performance for an M3 Max MacBook Pro price is a lot of money to get a computer into a headset. Maybe there's some killer app that a head-mounted computer does so much better than a laptop that it's worth 3x the money - I don't see it right now, but it might exist (at least not mass-market enough to interest Apple - I'm sure there are vertical markets).

 

[XboxEvolved]

$3500 is quite a bit of margin as I have also heard that it probably cost them around $1500-1600 so they probably could make a small margin at $2k (honestly what it should have cost) but Apple doesn't operate like that. What may make you feel better is they do this with most of their high technology product. The MacBook Air was $1800 (and the SSD option which I believe was 72GB at the time was like $300-400 or some crazy number like that), iPhone's went down quite a bit thanks to subsidization originally (something that is certainly possible with AVP and a LTE option), the watch got at least a $100 drop with SE, and most of all a lot of these products all have innovations that eventually trickle down (or up) to other Apple products.

I think the main things keeping the price up now is construction of the thing. I don't think it's really the electronics but the glass, frame, and how they are all packed in once they figure that stuff out I don't see why in 2 years a AVP at least with the almost same specs as the one releasing in a few weeks, couldn't be priced at $2k.

 

[Abazigal]

It's actually a $1249 Apple laptop (AppleInsider Price Guide for a 13" MacBook Air with the M2 with 8 core CPU and 10-core GPU, 16 GB RAM, 256 GB storage. It's a bit more hardware than a $849 iPad Pro, since the iPad uses a slightly cut-down M2 and the Vision Pro uses a full-on version. The iPad also only has 8 GB of RAM until you get to the high-storage models...

Yes, there are some odd PCBs in the Vision Pro, and there's some significant money in the displays... Apart from 3D, the two displays together are (probably) relatively similar to a good 95%DCI 4K display. That's probably a $600 display.

If it's THAT expensive to build the hardware into the form factor (and it may be), how big is the market going to be? M2 MacBook Air performance for an M3 Max MacBook Pro price is a lot of money to get a computer into a headset. Maybe there's some killer app that a head-mounted computer does so much better than a laptop that it's worth 3x the money - I don't see it right now, but it might exist (at least not mass-market enough to interest Apple - I'm sure there are vertical markets).

My guess is that the (comparatively) higher price of the vision pro is in part due to its (rumoured) lower supply. If you expect to sell every unit you make for the first year or two, why not maximise your profit while you are at it by charging a price point where demand = supply?

We may see a price drop with the 2nd gen as production improves, app availability improves, and more people hop on board when the Vision Pro becomes a proven product category. Right now, it's likely going to developers and early adopters.

Another thing I realised about Apple products early on is that the user experience they afford is often more than the sum of their parts, which is how they get away with charging the margins that they do. Even if a competitor is able to offer a similar product with the exact same specs and build quality for cheaper, something is often off or missing, and that something is usually enough to justify spending the extra cash to get Apple's offering instead.

The killer app, I feel, is immersion. Such as the ability to capture key moments in spatial video and view them again on the Vision Pro. You don't get that same level of immersion when viewing content on a cheaper headset like that from Facebook, which is why I always felt that comparing the vision pro to a $500 alternative was disingenuous and misleading. Like haven't we already been through this whole debate with iPhones vs $100 android handsets or iPads vs cheap android tablets or Apple Watches vs Fitbits?

My bet is that once you have tried the vision pro, every other headset will feel like crap in comparison. People might end up returning theirs and getting a cheaper alternative in order to save some money, but the experience will never be the same, and they will know it, and they will hate every moment of it.

 

[spiderman0616]

To say this is to dismiss literally almost all of the other R&D and physical technology involved in the creation of this device. It is quite obviously far more sophisticated than a Mac mini strapped to your face.

 

[danwells]

I suspect Abizagal is right - it will offer an experience MUCH better than any other consumer-level headset (is it even a consumer-level headset?).

The question is whether there is a market large enough to interest Apple for a headset that expensive. I don't think the vertical markets for professional headsets (even combined) are big enough to interest a ~$3 trillion company. Even if the margins on professional visualization headsets are huge, the markets are relatively small and fragmented. Even if the hardware is similar, the software and support are very different for astrophysicists visualizing galactic collisions and for mechanics fixing airplanes.

Apple is ONLY interested in true mass markets. As an example, they haven't built a standalone camera since the 1990s, and, with their interest in iPhone photography, it would be a very logical product. They could join the L-mount to avoid having to develop their own lenses and accessories. The problem is that the camera market isn't big enough to interest them. The professional visualization market is a fraction the size of the interchangeable lens camera market! They have to have a true mass-market play, or think they have one...

I just don't think there is a mass market for a $3500 headset. Nobody's ever managed to sell a headset to ordinary consumers, except for gaming. The price band for gaming headsets is $300-$800. with SERIOUS resistance above $500. Yes, Apple's going to do a better job on the communications side than their predecessors (mostly Meta). I have no doubt that the Vision Pro will be FAR more functional than any of the Meta/Oculus stuff, and will make meetings, phone calls, etc. far more pleasant than with anything from Meta. Will a true mass market pay $3499 for that? My bet is not...

 

[spiderman0616]

I suspect Abizagal is right - it will offer an experience MUCH better than any other consumer-level headset (is it even a consumer-level headset?).

The question is whether there is a market large enough to interest Apple for a headset that expensive. I don't think the vertical markets for professional headsets (even combined) are big enough to interest a ~$3 trillion company. Even if the margins on professional visualization headsets are huge, the markets are relatively small and fragmented. Even if the hardware is similar, the software and support are very different for astrophysicists visualizing galactic collisions and for mechanics fixing airplanes.

Apple is ONLY interested in true mass markets. As an example, they haven't built a standalone camera since the 1990s, and, with their interest in iPhone photography, it would be a very logical product. They could join the L-mount to avoid having to develop their own lenses and accessories. The problem is that the camera market isn't big enough to interest them. The professional visualization market is a fraction the size of the interchangeable lens camera market! They have to have a true mass-market play, or think they have one...

I just don't think there is a mass market for a $3500 headset. Nobody's ever managed to sell a headset to ordinary consumers, except for gaming. The price band for gaming headsets is $300-$800. with SERIOUS resistance above $500. Yes, Apple's going to do a better job on the communications side than their predecessors (mostly Meta). I have no doubt that the Vision Pro will be FAR more functional than any of the Meta/Oculus stuff, and will make meetings, phone calls, etc. far more pleasant than with anything from Meta. Will a true mass market pay $3499 for that? My bet is not...

Tim Cook stated shortly after the original announcement that the cost of this product will price a lot of people out. They are very well aware of that issue.

 

[MockT]

The price will always be what the market can bear - the company would be run irresponsibly otherwise. You're essentially guesstimating a bill of materials for the AVP and may just be wildly off. The OLED panels are incredibly hard to source and only available to Apple in these quantities. They really pushed the envelope on making them available to consumers as early as they did.

Think of this as a non crappy Quest Pro ($1500) with Apple premium integration, materials, support, and markup and the price is really just about right.

 

[TLewis]

When the Apple Macintosh 128K first came out in the early 80s, its price was something like $2500. In today's money, that's well over $7000, and so that was much less affordable than the VP.

I wonder if Apple will keep the price around $3500 and just let inflation make it "more affordable"?

 

[Polinsky]

A Mac mini with the exact same CPU, GPU, RAM and storage as the Vision Pro is $799!

That is an absolutely absurd comparison.

 

[ZombiePhysicist]

I do not buy that it costs that much to make. I would be very surprised if the cost is not between $800-1000. Meaning they make 75% margin.

Version 2 of the AVP wont have some great new features worth talking about. It's big feature will be they lower the cost to 'only' 1999.

 

[MockT]

I do not buy that it costs that much to make. I would be very surprised if the cost is not between $800-1000. Meaning they make 75% margin.

Version 2 of the AVP wont have some great new features worth talking about. It's big feature will be they lower the cost to 'only' 1999.

Closer to double that, according to best available information.

Vision Pro Production Materials Cost $1,590, Sources Say - XR Today

XR Today reports on the latest extended reality news from around the globe, including virtual reality, augmented reality and mixed reality.

www.xrtoday.com

Focussing on bill of materials is particularly inappropriate in first-generation devices in a new category.

 

[ZombiePhysicist]

Closer to double that, according to best available information.

Vision Pro Production Materials Cost $1,590, Sources Say - XR Today

XR Today reports on the latest extended reality news from around the globe, including virtual reality, augmented reality and mixed reality.

www.xrtoday.com

Focussing on bill of materials is particularly inappropriate in first-generation devices in a new category.

Thank you. I've seen that report and many others like it in the past, and they have often proven very inaccurate. If you add up the cost of an iPhone 15 and a MacBook air, it doesnt come to that in cost of goods.

I could easily be wrong, but I dont buy it. Still even if it is $1500, the average sale price is going to be around 4000 with upgrades/cases/applecare/etc. That's still like a 2/3rds margin. They are printing money with this thing.

 

[fathergll]

Decent troll OP

8/10

 

[MockT]

Thank you. I've seen that report and many others like it in the past, and they have often proven very inaccurate. If you add up the cost of an iPhone 15 and a MacBook air, it doesnt come to that in cost of goods.

I could easily be wrong, but I dont buy it. Still even if it is $1500, the average sale price is going to be around 4000 with upgrades/cases/applecare/etc. That's still like a 2/3rds margin. They are printing money with this thing.

Well, if you want to buy VR headsets at cost, Meta has you covered. ;-) I think that stark comparison just shows the premium Apple can command for a device by virtue of it being part of their ecosystem - to me justifiably so.

Others may come to a different conclusion. However, the fact that Apple has captured the revenue of the entire 2023 US AR/VR market in three days of preorders probably vindicates them.

 

[Timo_Existencia]

There's really no comparing the AVP to any other Apple products. It stands in a category all its own. And for the tech inside, this is priced competitively. And for the R&D that it took to build it, they need to be able to recoup that as well.

To my thinking, there's nothing like the AVP at any price point. And for the uses I've got planned for it, the value is aligned well.

But, if you can't afford, that's only a calculation you can make.