In what will come as a surprise to exactly nobody, the revolutionary if ridiculously overpriced Vision Pro virtual reality headset, which retails for $3,500, is not selling.

While it was hardly necessary – at least for anyone with a functioning frontal lobe –  an analysis published this morning by the widely-read TF International Securities analyst Ming-Chi Kuo (best known for gathering intelligence from his contacts in Apple’s Asian supply chain), who back in January correctly reported that Apple has lowered its 2024 iPhone shipments to a 15% decline, reported that Apple has cut its full year Vision Pro shipments to 400–450k units by as much as 50% versus the market consensus of 700–800k units or more.

Kuo also notes that Apple cut orders before launching Vision Pro in non-US markets, which means that “demand in the US market has fallen sharply beyond expectations, making Apple take a conservative view of demand in non-US markets.”

Of course, it’s not like anyone – except of course for AAPL’s multimillionare management team – had expected that $3,500 heavy neck braces would sell like hot cakes – so it’s not exactly a surprise to anyone, excpet Apple which is now “reevaluating its headset roadmap, potentially delaying the launch of a more affordable mixed-reality headset beyond 2025.”

Below we excerpt from the full note.

  1. Apple has cut its 2024 Vision Pro shipments to 400–450k units (vs. market consensus of 700–800k units or more).
  2. Apple cut orders before launching Vision Pro in non-US markets, which means that demand in the US market has fallen sharply beyond expectations, making Apple take a conservative view of demand in non-US markets.
  3. Apple is reviewing and adjusting its head-mounted display (HMD) product roadmap, so there may be no new Vision Pro model in 2025 (the previous expectation was that there would be a new model in 2H25/4Q25). Apple now expects Vision Pro shipments to decline YoY in 2025.

The weak-than-expected Vision Pro demand means that the following new trends are likely to be below market expectations.

  1. MR headset devices. The challenge for Vision Pro is to address the lack of key applications, price, and headset comfort without sacrificing the see-through user experience. In contrast, VR is also a niche market, but at least there are proven successful applications (games), and trend visibility is better than MR.
  2. Pancake. As the upgrade of optical specifications for smartphones has slowed down for several years, investors expect Pancake, which has a significantly higher unit price than lenses, to become a new growth driver for the optical sector. Weaker-than-expected shipments of Vision Pro will lower Pancake’s contribution to the optical industry in the foreseeable future than investors’ expectations.
  3. Micro OLED. Vision Pro/MR headset is the most critical application of Micro OLED. With key applications not growing as expected, the timeframe of mass production and adoption of Micro OLEDs in other small-sized consumer electronics devices will be delayed.

Judging by the meltup in AAPL stock – as the rest of the tech sector is grinding lower – it seems that the catastrophic launch of the Vision Pro isn’t news to anyone.