Here's How Much It Costs Apple to Make a Vision Pro Headset

[Zest28]

What an utterly ignorant take on how technology is developed.

You think sensor fusion capability just fell from the sky? You think the ability to push this amount of pixels just happened? You think the depth mapping frameworks and APIs just grow from trees? Apple has spent over a decade developing and rolling out everything that makes the AVP work right out in the open.

You think a product is just the sum of the components purchased from suppliers?

You could dump the exact components that the AVP is made up of but out in a table at Meta and they wouldn’t be able to make it work as well. Millions of engineering hours has been invested in the development that puts these components together to work. An OS working *in tandem* with a real time sensor fusion OS doesn’t just happen.

Please, Apple doesn’t make displays and sensors themselves, they buy this from manufacturers. They are the ones paying for the R&D and is already priced in the components that Apple pays for. Why you think Apple went to Sony? Because Sony has been using this types of displays for many years already in their camera’s.

And software wise, the $500 Quest 3 can do pretty much the same thing so there is no way $2000 went into the software side.

There is a reason why Apple used to be the richest company in the world.

And yes, I will buy the Apple Vision Pro, but the 2nd generation one. I will bring a big jar of Vaseline with a lot of extra lube to the Apple Store knowing that the markup is so high, you can buy 4 Quest 3 for that $2000 markup Apple puts on top of it.

 

[basehead617]

What would be the sense in that? This product is supply limited, not demand limited. If you can only make 100 of something, why would you willingly sacrifice revenue? That’s just bad business.

Ask Rolex.

 

[svish]

$1500 does not include the cost for years and years of R&D. But there is room for a cheaper Vision in the future.

 

[rukia]

Please, Apple doesn’t make displays and sensors themselves, they buy this from manufacturers. They are the ones paying for the R&D and is already priced in the components that Apple pays for. Why you think Apple went to Sony? Because Sony has been using this types of displays for many years already in their camera’s.

And software wise, the $500 Quest 3 can do pretty much the same thing so there is no way $2000 went into the software side.

There is a reason why Apple used to be the richest company in the world.

And yes, I will buy the Apple Vision Pro, but the 2nd generation one. I will bring a big jar of Vaseline with a lot of extra lube to the Apple Store knowing that the markup is so high, you can buy 4 Quest 3 for that $2000 markup Apple puts on top of it.

"the $500 Quest 3 can do pretty much the same thing so there is no way $2000 ..."

This gets tossed around a lot without any thought. A fission nuclear reactor can do pretty much the same thing as a fusion reactor so no way countries are spending hundreds of billions in fusion research over decades ? A $50 Casio watch can do pretty much the same thing as an atomic clock so there's no way millions of dollars were spent on R&D for that ? A battery with Cobalt can pretty much do the same thing as one without so there's no way CATL is spending millions in R&D to try to minimize the amount needed ? While you may not appreciate the difference between rock steady objects fixed in place compared to a jittery one causing eye fatigue rest assured that the R&D involved will cost Meta a substantial amount and many years to achieve if they can even do it. Same for the accuracy in the eye and hand tracking as well as the ability to push 23MP at 90 FPS with 12ms latency, in a 1.2 lbs enclosure, silently and without burning your face off. A massive gaming laptop can't push 4K games at a modest 30 FPS without sounding like a leaf blower. I get it, you like Casio and there's nothing wrong with it but please don't compare it to an atomic clock just because you can't appreciate the difference.

 

[leman]

Ask Rolex.

Rolex watches depend on technology that makes it difficult to manufacture in high volume? That’s surprising. I’d thought the industrial manufacture of those things has been perfected a century ago. Are you sure that making a Rolex is as difficult as making a 3400 ppi microOLED display panel?

 

[Zest28]

So what does Apple's display team do all day ? Do they sit around watching Netflix then click "add to cart" when they need a new batch ?

"the $500 Quest 3 can do pretty much the same thing "

This gets tossed around a lot without any thought. A fission nuclear reactor can do pretty much the same thing as a fusion reactor so no way countries are spending hundreds of billions in fusion research over decades ? A $50 Casio watch can do pretty much the same thing as an atomic clock so there's no way millions of dollars were spent on R&D for that ? A battery with Cobalt can pretty much do the same thing as one without so there's no way CATL is spending millions in R&D to try to minimize the amount needed ? While you may not appreciate the difference between rock steady objects fixed in place compared to a jittery one causing eye fatigue rest assured that the R&D involved will cost Meta a substantial amount and many years to achieve if they can even do it. Same for the accuracy in the eye and hand tracking as well as the ability to push 23MP with 12ms latency without burning your face off. I get it, you like Casio and there's nothing wrong with it but please don't compare it to an atomic clock just because you can't appreciate the difference.

You really think Apple invented micro OLED? Sony had micro OLED displays in their own camera's for years. Apple didn't invent it.

I get it, you try to somehow justify how Apple has a $2000 margin on top of the actual $1500 cost and claim it was Apple their R&D team that created micro OLED. But it was Sony who did this many many years ago so this is not part of the $2000 margin Apple charges.

And the Quest 3 is not a $50 Casio watch, because the Quest 3 is actually more advanced than the AVP in certain area's. For example, the Quest 3 can handle multiple Virtual Desktops at the same time while the AVP is only limited to 1 Virtual Desktop. And the Quest 3 is compatible with both Mac and PC, unlike the AVP.

As I said, I will buy the AVP myself too once the 2nd generation is released, but I will not pretend that Apple is not screwing me hard without lube.

 

[rukia]

You really think Apple invented micro OLED? Sony had micro OLED displays in their own camera's for years. Apple didn't invent it.

I get it, you try to somehow justify how Apple has a $2000 margin on top of the actual $1500 cost and claim it was Apple their R&D team that created micro OLED. But it was Sony who did this many many years ago so this is not part of the $2000 margin Apple charges.

And the Quest 3 is not a $50 Casio watch, because the Quest 3 is actually more advanced than the AVP in certain area's. For example, the Quest 3 can handle multiple Virtual Desktops at the same time while the AVP is only limited to 1 Virtual Desktop. And the Quest 3 is compatible with both Mac and PC, unlike the AVP.

As I said, I will buy the AVP myself too once the 2nd generation is released, but I will not pretend that Apple is not screwing me hard without lube.

I own many Sony mirrorless cameras including the A7RV with its excellent EVF. However, this is not even close to the same thing as the displays in the Vision Pro. OLED is not OLED. Every minor difference to the pixel, density, manufacturing, etc. requires a great deal of R&D to accomplish because the problems are extremely difficult. When a vendor does not have a massive market to justify development the company that wants it, Apple in this case, has to be involved to cover the R&D costs. Apple has a long history of building out entire factories for companies to make the deal work. Even with Apple's backing Sony doesn't seem to want to be involved with the Vision Pro displays (see below) which is why the rumors say Apple has to look elsewhere. This is understandable because they don't really have a massive market that justifies the expensive capex and opex for Vision Pro displays. Not even the flagship Sony A1 justifies this BOM cost.

LG created a 5K panel that had a very niche market within Apple and zero customers outside of Apple. You think LG paid for the R&D for that ? Yes, it required R&D as well as an expensive new manufacturing line which is why these niche 5K / 6K monitors cost so much. Gurman claims that Apple iPad Pros will have tandem OLED displays. Again OLED is not OLED and it's more involved than taking crazy glue to two OLED panels. You can probably guess that Apple is the one paying for the extensive R&D and manufacturing ramp, as well as being involved with the development, which is why there are no other companies with a tandem OLED display (assuming rumor is true). With these types of partnerships it's actually the other companies that have the better deal. Apple puts up the money, contributes to the R&D, and assumes the risk. Even if the other company doesn't use the product they can leverage the technology to something that works for them. Sony might have some form of higher density microOLED EVF and tandem OLED back displays for their mirrorless cameras that are cheaper with lower spec than Apple's displays all courtesy of Apple's contribution.

Sony refuses to increase Vision Pro screen production capacity for Apple

Even as analysts predict limited supplies of the Apple Vision Pro at launch, Apple has apparently asked Sony to make more of the headset's eye screens — and Sony has said no.

appleinsider.com

 

[Zest28]

I own many Sony mirrorless cameras including the A7RV with its excellent EVF. However, this is not even close to the same thing as the displays in the Vision Pro. OLED is not OLED. Every minor difference to the pixel, density, manufacturing, etc. requires a great deal of R&D to accomplish because the problems are extremely difficult. When a vendor does not have a massive market to justify development the company that wants it, Apple in this case, has to be involved to cover the R&D costs. Apple has a long history of building out entire factories for companies to make the deal work. Even with Apple's backing Sony doesn't seem to want to be involved with the Vision Pro displays (see below) which is why the rumors say Apple has to look elsewhere. This is understandable because they don't really have a massive market that justifies the expensive capex and opex for Vision Pro displays. Not even the flagship Sony A1 justifies this BOM cost.

LG created a 5K panel that had a very niche market within Apple and zero customers outside of Apple. You think LG paid for the R&D for that ? Gurman claims that Apple iPad Pros will have tandem OLED displays. Again OLED is not OLED and it's more involved than taking crazy glue to two OLED panels. You can probably guess that Apple is the one paying for the extensive R&D and manufacturing ramp, as well as being involved with the development, which is why there are no other companies with a tandem OLED display (assuming rumor is true). With these types of partnerships it's actually the other companies that have the better deal. Apple puts up the money, contributes to the R&D, and assumes the risk. Even if the other company doesn't use the product they can leverage the technology to something that works for them. Sony might have some form of higher density microOLED EVF and tandem OLED back displays for their mirrorless cameras that are cheaper with lower spec than Apple's displays all courtesy of Apple's contribution.

Sony refuses to increase Vision Pro screen production capacity for Apple

Even as analysts predict limited supplies of the Apple Vision Pro at launch, Apple has apparently asked Sony to make more of the headset's eye screens — and Sony has said no.

appleinsider.com

Well, true. Sony need to be motivated by Apple to research and develop the displays that ended up being used for the AVP. If there is no demand for this, Sony will not do it. But the point is, there is no way Apple spend that much money on R&D as most of it was on the side of Sony.

LG is a different story because they were more like a "partnership". The LG Ultrafine 5k at some point even became Apple their official standalone display at some point.

But let's agree to disagree. You think the $2000 margin is R&D while I think most of it is just typical Apple taking a huge profit margin.

 

[rukia]

You think the $2000 margin is R&D while I think most of it is just typical Apple taking a huge profit margin.

It's not a $2000 margin or $2000 in R&D. The costs and ASP for a product are far more complex than that but I've shared some of my thoughts in these posts.

Here's How Much It Costs Apple to Make a Vision Pro Headset

The labor costs for assembly doesn't even capture the full picture because a new complex product like this will suffer from lower yield. The $3500 cost doesn't cover just the BOM but all the defective parts and product that had to be thrown away. Sales is also significant for this. They are...

forums.macrumors.com

Here's How Much It Costs Apple to Make a Vision Pro Headset

Restaurants operate with low single digit margins and barely stay in business. However, they will sell you alcohol with 10x markup. McDonald's will price gouge you on fries and fountain soda that cost pennies but franchisees don't seem to make Meta sized margins. Speaking of margins Meta is...

forums.macrumors.com

 

[ender78]

But let's agree to disagree. You think the $2000 margin is R&D while I think most of it is just typical Apple taking a huge profit margin.

You are confusing the cost of component costs/margin and profit. The vendor in this story "estimated" the component costs. Apple chooses to work with the best component manufacturers like Sony/Samsung/LG/TSMC to build its products.

The fact that the product comes off of a Sony line does not mean that Sony bore the entire development or design cost. A lot of great work goes into building a custom version of anything. Let's not forget that all of this stuff is patented such that one way or another Apple has to pay for IP that may be held by a company like Sony.

Articles by these "component estimators" due many of their readers a disservice. They convince those that believe that this is pure profit that they are being ripped off.

At a development cost estimated to exceed $10 Billion and assuming a $2000 pure profit, Apple will start making money on the AVP once they sell 5 Million headsets.

 

[ender78]

Well, true. Sony need to be motivated by Apple to research and develop the displays that ended up being used for the AVP. If there is no demand for this, Sony will not do it. But the point is, there is no way Apple spend that much money on R&D as most of it was on the side of Sony.

Sony needed to be PAID by Apple to bring this product to life. Just because Sony engineers did some partition (even if most of the work) does not mean that Apple is not innovating. Apple R&D dollars are going to build this product. Without those dollars, they product is not likely to exist.

You seem to think that product like this are like Lego. Go to the computer store, but a pair of displays, some cameras and an SSD, pick an M1 from a parts bin and boom you have the AVP.

 

[Zest28]

Sony needed to be PAID by Apple to bring this product to life. Just because Sony engineers did some partition (even if most of the work) does not mean that Apple is not innovating. Apple R&D dollars are going to build this product. Without those dollars, they product is not likely to exist.

You seem to think that product like this are like Lego. Go to the computer store, but a pair of displays, some cameras and an SSD, pick an M1 from a parts bin and boom you have the AVP.

Sony got paid as part of the $1500 total cost of the AVP.

And keep drinking the koolaid that it was Apple doing the innovation instead of Sony who has been making these type of displays for over a decade.

 

[ender78]

Sony got paid as part of the $1500 total cost of the AVP.

And keep drinking the koolaid that it was Apple doing the innovation instead of Sony who has been making these type of displays for over a decade.

Innovation paid for or fully funded by Apple is Apple innovating. The fact that they are using a partner that has like you say decades of experience is a good thing. It would be foolish to expect any company to fully insource all the work.

 

[onenorth]

Restaurants operate with low single digit margins and barely stay in business. However, they will sell you alcohol with 10x markup. McDonald's will price gouge you on fries and fountain soda that cost pennies but franchisees don't seem to make Meta sized margins. Speaking of margins Meta is making zero to negative margins on their Quest line yet their corporate margins seem obscene. Perhaps it's better to understand that a business has numerous components that may be synergistic with carefully calculated gains and losses that offset one another. That being said the ASP for the Vision Pro is nowhere near "ludicrous" when you factor in all the costs and it's probably below Apple's target margin at the corporate level. It's impossible to derive a "right price" from R&D or any other single component.

I like the way you have explained this, it makes sense to me.

About 25 years ago Chevrolet decided to produce the Avalanche, which was a modified Suburban, primarily because they had excess manufacturing capacity. The margins for the Avalanche were not great but it still helped the bottom line to make use of the excess capacity with a niche product that sold in reasonable numbers for many years. Eventually the excess capacity went away and so did the Avalanche. I suspect Apple still makes the iPhone 13 because it has excess capacity for a low volume product having sunk development costs, which helps fill the coffers. With many moving parts, big companies can shuffle the money around. When I worked at Disney, we called this Mickey Mouse money. One money sucking project was subsidized by another profitable one. As long as the shareholders are not revolting.

 

[rukia]

Sony got paid as part of the $1500 total cost of the AVP.

This is likely not true. Partnerships can have R&D, manufacturing, and per unit cost separated out or blended in various combinations. For very high volume commodity parts the costs may be combined into agreed upon unit costs. For extremely low volume parts like Vision Pro displays it’s almost certain that Sony wants R&D and manufacturing paid upfront while the unit cost will be based on the estimators yield. The final costs also consider the degree of IP sharing and ownership.

 

[Richard700]

Wether technically it could happen or not I really wish the compute unit was dumped in the battery pack too, just like a lumpy iPhone in your pocket or whatever. Leave the R1 chip in the headset to handle user input and low latency passthrough. This would surely reduce the bulk and complexity of the headset a fair amount. It would also let you upgrade the compute unit independent of the 'screen' in the future.

Sounds like a good concept - the battery is already separate. But I doubt if the resulting battery / cpu combo would still be small enough to fit in a pocket - the battery pack is already quite large for a pocket, and would you be able to cool the processor sufficiently in that tight and small a package (cooling is not that effective if it's in your pocket) - after all it is a pretty potent processor. I doubt the processor board adds a lot of weight and volume to the headset.
What they need to do is get rid of that useless eye display on the front. (And put in better cameras - my two main gripes).

 

[Richard700]

Honestly, I would rather see them focus on improving FOV, motion blur, and the cameras before making a more affordable model.

I returned it because it wasn’t good enough, not because it was too expensive. I realize for other people, they would rather have the price come down.

I agree - a lower price model will need to cut costs somewhere. I would rather have an improved 2nd gen product
(although I did keep mine, because I don't think that is going to happen for a while, and I can live with it as it is until then)

 

[NT1440]

Sony got paid as part of the $1500 total cost of the AVP.

And keep drinking the koolaid that it was Apple doing the innovation instead of Sony who has been making these type of displays for over a decade.

There’s nothing “koolaid” about how tech *manufacturing* business models work. You seem to be wholly unaware of how companies like LG, Samsung Display, etc do low volume manufacturing 🤷‍♂️

What do you think Google is doing with their Tensor processors? This is how the industry functions. That’s the reality of it.

 

[Apple_Gabe]

The only thing that appeals to me about the Vision Pro is that it would be pretty cool to use on a trip, like on a long car ride or on an airplane. But I feel like using it for an extended amount of time can't be good for someone's eyes. I'm going to pass on it for now.