5 ms·

Apple Vision Pro's components cost $1,542–but that's not the full story

50 points by mpweiher 3y ago

empath-nirvana 3y ago
A lot of people have told me they'll buy it when it gets down to around $1,000 and I just don't see a way to get there from here. You can drop the second display, make the frame out of cheaper parts, that gets you down to what -- $1,200 in costs? Maybe they get the cost of the chips down? I don't think they'll ever use a cheaper main display -- if anything they'll just keep improving the quality. I don't see this going below $2,000 any time soon.
- ildjarn 3y ago
  Lots of people would probably pay 2k for a much better headset too. There are multiple ways Apple can attack this.
  - empath-nirvana 3y ago
    I think the main reason that they aren't going to focus on cost reduction is that it's not really good enough right now. The people that won't buy it at $3500 won't buy it at $2000, either. Anything north of $1,000, if you're not just selling it to ultra wealthy people who don't care about money, it's got to be a core part of their existence like a phone is, or their job is paying for it. And I don't think the product, as it is, is that. A lot of people wouldn't use it if you gave it to them _for free_.
    - spacebanana7 3y ago
      Unless they can come up with financing options. A lot more people might be willing to pay $150 a month for a new VR headset every couple of years.
    - posix_monad 3y ago
      If you have a small apartment but enough disposable income to drop $2000 on a TV-set (common situation) I can see it be compelling.
      - 65 3y ago
        Can't watch it with other people though. Still need to strap a heavy headset to your face instead of just clicking a button to turn the TV on. I'd still rather have a TV than Vision Pro.
      - deleted 3y ago
        [deleted]
  - 65 3y ago
    I would pay $2,000 for great AR/VR glasses - not goggles like the Vision Pro or Quest. Something like the XReal Airs but higher resolution. Why Apple didn't work on this category - glasses - and instead worked on VR goggles, which for years have already been a niche for gaming (something Apple sucks at), is beyond me.
    - apocalyptic0n3 3y ago
      The reports a year ago were that this was their true goal, but they had to postpone AR glasses due to "technical challenges". The Vision Pro was the fallback product that let them enter the market years ahead of where they otherwise would have been able to. 1: https://www.reuters.com/technology/apple-indefinitely-postpones-launch-ar-glasses-bloomberg-news-2023-01-18/ https://www.reuters.com/technology/apple-indefinitely-postpo... 2: https://www.bloomberg.com/news/articles/2023-01-18/apple-postpones-ar-glasses-plans-cheaper-mixed-reality-headset https://www.bloomberg.com/news/articles/2023-01-18/apple-pos...
      - deleted 3y ago
        [deleted]
    - markus_zhang 3y ago
      A side note: it might still be valuable for developers to get one of these -- if we believe that Apple can eventually produce those glasses, I'd assume that experience in developing apps on Vision Pro is still valuable.
    - empath-nirvana 3y ago
      > Why Apple didn't work on this category - glasses - and instead worked on VR goggles Probably because it's a fantasy that can't exist with current technology.
      - 65 3y ago
        It already exists: https://www.xreal.com/us/ https://www.xreal.com/us/
- larsnystrom 3y ago
  I don’t think they’ll lower the price for Apple Vision Pro, but if they can get good performance out of cheaper components they might release an Apple Vision Air I guess. Not happening anytime soon though.
- the_other 3y ago
  It's such a niche product with no real world applications. Keep it expensive; no big deal.
  - michaelt 3y ago
    Well, there's a vicious cycle with this sort of tech. When sales are low, nobody releases great new applications for it. When nobody releases great new applications for it, sales stay low.
    - bombcar 3y ago
      Apple needs to release a killer app. If even they can’t, then they have a serious problem.
    - politician 3y ago
      Only Apple can release apps for this because no one else can justify the lost revenue that Apple takes off the top in fees.
    - asadotzler 3y ago
      Nah, people have been building amazing content for VR headsets since the 80s. i used to use them in arcades and companies toured devices and content across college campuses in the 90s and we've had Quest for a decade with 6 million MAU today so there's plenty of attempts and it all falls short of mainstream value. Useful for gaming and some VR porn and that's about it. No strap-on dorkbox face computer will ever take off for productivity, not as long as half of office workers spend huge amounts of time on hair an makeup to look nice at the office. No chance they're gonna muss that all up to get another couple screens at their desk when they've got desktops, laptops, tablets, and phones already.
      - the_other 3y ago
        > face computer will ever take off for productivity, not as long as half of office workers spend huge amounts of time on hair an makeup to look nice at the office. The hair and make-up thing seems like it'll be a thing. But the main thing is that it's just not a productive interface. It might be, eventually... but I doubt it. There's very little usability gain in distributing most "work" data in 3d like this. Most of us rarely need to track or navigate around three dimensions of data in real time, and when we do, 2d projections are usually enough.
- madeofpalk 3y ago
  For comparison, Macbook Air starts at 13" $1100 or 15" $1300. iPad Pro is $800 or $1100 depending on screen size. Both have M2 chips, like the Vision Pro. Functionality wise Vision Pro is a lot closer to an iPad than Mac, but it's also a lot 'higher tech' than either of them. There's no way even a cheaper variant is priced under iPad.
  - amelius 3y ago
    Why do you think it is "higher tech" than a laptop?
    - deleted 3y ago
      [deleted]
    - madeofpalk 3y ago
      it is more advanced technology. E.g. the exceptionally dense resolution displays, compared to the displays in laptops. All the sensors and eye and hand tracking.
      - HPsquared 3y ago
        Lots of development cost, in other words, that needs to be amortized.
    - Arn_Thor 3y ago
      Top of the line displays, not one but two advanced CPUs one of which is brand new, a smorgasbord of sensors…
- dannyw 3y ago
  Huh? $1542 of BOM for a relatively low-volume, first-gen product is actually quite low. With volume, scale, and manufacturing improvements, there is certainly room to keep the same quality and parts and get it under $500 BOM. I'm sure. But you'll need to wait a couple years. My first 4K monitor costed me $2k maybe a decade ago. Today, I can get a better one for $350.
  - asadotzler 3y ago
    yes in a decade they can sell the AVP for $500 and not lose money. in a decade the AVP will be a joke and we'll have abandoned this nonsense once and for all (except for the actually useful gaming and porn applications.)
- loregate 3y ago
  Why don't they just buy a Meta Quest 3?
  - ekun 3y ago
    No Apple logo.
  - wl 3y ago
    Requires having an account with Facebook.
  - mattgperry 3y ago
    Because the screens are shit, comparatively. Also the OS is years behind.
    - asadotzler 3y ago
      the smearing with any head movement on the AVP and the glares or flares or whatever those are have made it unsuitable for movie watching for my movie buff friend who got it because of the "better" screens. He's back to his Quest.
  - Retric 3y ago
    Ultimately the Quest is designed as a VR game console and it does that well for an affordable price, but it’s the AR aspects of the Vision Pro that people are excited about. Head to head the Meta Quest 3 has worse screens and cameras, only runs one app at a time, requires controllers, less comfortable while reclined etc. And while Meta removed the mandatory Facebook integration that really damaged people’s perception of the brand. In the end more affordable products sell, but people still lust after supercars not daily drivers.
    - drivers99 3y ago
      > mandatory Facebook That was the reason I was never going to touch any future Oculus product but I didn’t realize they dropped that requirement until now.
    - 3y ago
- mattgperry 3y ago
  They might carry on improving the quality for the Pro (although this also has limits and diminishing returns) but they don't need to do that if they're targeting a sub $1000 headset, they just need to make these screens cheaper.
- stetrain 3y ago
  They'll keep improving the quality for the top end product, sure. But screens with today's quality will fall in price over the next few years. Apple loves putting tech they have already paid the initial manufacturing scale-up costs on into lower tier products.
michaelbuckbee 3y ago
The analyst firm seems like they specialize in display panels, electronics etc. so it makes sense that their BOM breakdown doesn't include all the other (quite expensive components) that go into the device. So this number isn't "wrong" so much as specialized.
123yawaworht456 3y ago
>A bill of materials like this doesn't take into account manufacturing, shipping, or marketing, nor does it factor in the cost of research and development. it also (likely) doesn't take into account the massive discounts you get at scale and Apple's famously optimized supply chain. I wouldn't be surprised if the real BOM is sub 1K.
- deleted 3y ago
  [deleted]
- danpalmer 3y ago
  I'm not so sure. Taking the displays at $228, these are specialist components that require integration work – I don't think one can walk into the Sony offices and ask to buy one (1) of them. That would then suggest that the "sticker price" is accounting for a certain level of scale, and while Apple are high volume in general, this device is not particularly high volume. Also volume discounts on components such as this don't tend to be that significant as to achieve a 33% reduction on price.
  - notso411 3y ago
    [dead]
- acdha 3y ago
  Isn’t that this company’s entire business? I’d be surprised if they were anywhere that far off on the first question most people would have, and most of those parts are quite specialized so you aren’t going to see volume discounts unless the market grows significantly.
- hnbad 3y ago
  The Vision Pro doesn't exactly seem to have reached what I would normally think of as mass production so I wouldn't be surprised if the scale doesn't really work for them yet. That said, with raw numbers like this I always have to think of the teardown of the Juicero which revealed that it used numerous custom parts that certainly made it very expensive to manufacture: https://blog.bolt.io/juicero/ https://blog.bolt.io/juicero/ The catch with Juicero of course is that while the parts were very expensive, it could have been made much cheaper by using standard parts instead of the custom ones. I'm not saying that's the case here but it's worth taking these things with a grain of salt.
fafhnir 3y ago
A picture from Rubens is only 100$ in Materials, but this is not the whole story ;)
loueed 3y ago
Sony has a monopoly and limited production on MicroOLED, which is why the displays are the most expensive part of Vision Pro. Apple is reported to be testing displays from BOE, Apple will be able to negotiate better prices once Sony loses their monopoly. If Vision Pro 2 is planned for 2027, we might see Apple use Samsung eMagin OLED.
- asadotzler 3y ago
  BOE and Samsung and Japan Dispay are in market or ramping now.
hirako2000 3y ago
In case some still haven't realised, Apples has become mostly a status brand. Not an innovative, way ahead in quality maker. With a good touch of status. That flavour mix has died long ago along with Jobs. What's left is a money making machine sitting on its legacy. They are in the prada, gucci business. And have more cash in hand than most fortune 500 have in yearly revenue. Even if some combine. They can launch series of product that flop. They can RnD many cool things catering to the very rich, break even. At loss even. They could make new generations vision thingy with a 3k or more market, and at loss, at profit anyway in the end by selling specialised apps for other thousands of dollars a piece to feed the 0.01%, those are running out of ideas on how to spend their money. Apple is the shadow of itself 15y back, but got the power to continue surfing on that market for status money making business for years.
- hasty_pudding 3y ago
  Their products are still far and away better quality wise than most other brands though.
- toenail 3y ago
  > In case some still haven't realised, Apples has become mostly a status brand. Yet they sell a phone that generates revenue for them and don't have to sell all my personal data to advertisers.
  - ndjisjia 3y ago
    Apple has a multi billion dollar advertising business. What makes you so sure they don't use personal data for ads.
- hkpack 3y ago
  Wow, I am not sure how anyone can seriously write this without doubting himself even once. I get it, you provably not their user, but you can at least appreciate that people are using Apple not only for the status. My parents are using iPhones after so many android phones and cannot be happier. My mother is using iPad with keyboard after abandoning laptops and PC and couldn’t be happier. We use Apple in my family, because of the tight integration and ecosystem. We can share photos and videos easier than ever, FaceTime, collaborate, etc… Even new feature with desk sharing in FaceTime is amazing and allow me to help my kid with homework from far away. My M2 Macbook Pro is the best laptop I’ve ever owned by high margin. Tight interaction with iOS devices, Apple TV and Homepods is just amazing. In your world Apple is a status symbol, but in mine - it solves real problems for my whole extended family. Not everything is perfect but saying what you’ve said is just ignorant.
zokier 3y ago
I wonder how they got that $240 figure for SoC, I would have thought the marginal cost of a chip to be much much smaller? Of course attaching any price tag to in-house part is going to be problematic.
- stephen_g 3y ago
  That’s basically the problem with this kind of analysis, these are basically guesses, the real cost for that and any of the custom components could be 50% less or 400% more… What costs are they assuming is included in the BOM cost of the SoC? Mask sets and manufacture? NRE or no NRE? All of this makes a huge difference, but they don’t actually know what Apple pays for any of it…
- asadotzler 3y ago
  An SOC that Apple's selling at massive volume too via iPad or some other device, right? So no one can blame the hundreds of thousands, low volume of AVP for that steep price.
retskrad 3y ago
Apple was ahead of the curve and influential in the 2000s, but today, they seem to have run out of steam. They just released a $3500 head VR headset that has no purpose and is searching for a problem to solve and which is DOA for at least 5 more years and they are years behind the others in LLM's, which is literally changing the world akin to the iPhone. The company is so inert that they can't even get the Apple Car out. Frankly, Apple's current market cap baffles me. While Tim Cook is a competent manager, he doesn't quite match up to Satya Nadella. Satya consistently stays ahead of the curve, reminiscent of Apple's prowess in the 2000s. He dissolved Microsoft's AR/VR division months before the explosion of ChatGPT and LLMs and redirected Microsoft's focus to fully embrace LLMs. Managing a colossal company like Microsoft, it's truly impressive how swiftly he can pivot its direction. In contrast, Tim Cook appears more like a Sundar Pichai-style CEO, adept at weathering storms and maintaining stability. Investors are taking notice, and that's why Microsoft has not only maintained its position but surpassed a $3 trillion valuation, while Apple has faltered. I wouldn't be surprised if Nvidia eventually surpasses Apple in value too.
- danielvaughn 3y ago
  Microsoft's comeback in recent years has been very impressive to witness. Although I still can't make the jump to Windows, I'd at least be open to it at some point. Last time I booted a Windows machine, it showed me an ad on startup. Get rid of shit like that and I'll consider it.
  - pch00 3y ago
    If you live in the EEA you'll soon be able to get a de-crapified Windows 11 direct from Microsoft: https://arstechnica.com/gadgets/2023/11/europeans-can-soon-strip-bing-edge-other-microsoft-cruft-from-windows-11/ https://arstechnica.com/gadgets/2023/11/europeans-can-soon-s...
  - veidr 3y ago
    That shit is their bread and butter, though. They will literally never get rid of it, they've spent the past 5 years doubling down on that, and then doubling down on it again. Their message is clear: if you don't like it, fuck off. I have to have one Windows machine for certain shit, and while you can get rid of a lot of the ads only once, certain ones, like in-UI ads for Microsoft Teams, just keep coming back like Terminator. There's no way to get rid of them. At best, you can get rid of this specific version of the ad, but they will add a new "different" one in the next OS update. But Apple is on their six. My kids recently got old enough to need their own accounts on computers, and it is this hellish whack-a-mole with ads for Apple Music. Even though I think Apple is about as good as we'll ever get from a for-profit corporation, it's still deplorable. You will never not get ads if you cede control of "your" hardware to some corporate jackasses.
tartuffe78 3y ago
These comments will probably be quite amusing in 3-4 years time.
- anshumankmr 3y ago
  how so?
  - bombcar 3y ago
    No wireless. Less space than a nomad. Lame. But it could also be a quiet flop if they never get any traction because of a lack of apps.
whywhywhywhy 3y ago
What would the cost be if the designers hadn't wanted to play with curved glass? Would the product be that different without the glass front and second screen on the front? Would it have actually been better because it would be lighter, cheaper and with better battery life?
- acdha 3y ago
  > Would the product be that different without the glass front and second screen on the front? Well, the article has the cost savings at under 5%. Battery would probably be more but I’d be quite surprised if it was a game-changer: the processing needed to make XR work is just expensive and Apple has one of the best design teams in the industry so we can safely assume that they wouldn’t have missed an opportunity for a notable battery life improvement.
tdudhhu 3y ago
Also one big thing that is often overlooked is aftersales. I think Apple products are often overpriced, but using the BOM to estimate margins is kind of stupid.
- djyaz1200 3y ago
  That's a good point for other Apple products, but in this case, many other companies are not supporting the "platform" (Netflix, Spotify, YouTube); this may diminish the LTV of Vision Pro and its successors. I mention successors because the obvious next step is to put a $600 fancy detachable headband on an iPhone and call it Apple Vision (not pro). It may be that Apple's abusive track record in the App Store ends up getting them locked out of whatever the next thing is since it's clear that gated, extractive monopolistic practices are core to their identity and business model.
drexlspivey 3y ago
Honestly the whole concept of having 2 screens, one showing you what’s directly behind it and another one showing the other person your eyes (also directly behind it) seems so wasteful. There needs to be some technology advancement where you can overlay all the safari windows and apps onto a real see-through screen before this thing gains any real traction. This way you could get rid of 2 screens, a bunch of cameras, a dedicated chip that does the pass-through, the battery pack, half the weight and half the cost (or more). I believe Meta is trying something like this with their Ray Ban glasses.
cubefox 3y ago
It's interesting to compare this to the aggressively priced Meta Quest 3, which sells for $500: > they estimate that the components of the Meta Quest 3 alone cost an estimated $398 per headset. Combined with manufacturing costs, the price should be around $428 https://mixed-news.com/en/meta-quest-3-bill-of-materials-analysis/ https://mixed-news.com/en/meta-quest-3-bill-of-materials-ana... Related: > In its fourth-quarter earnings report Thursday, Meta said its Reality Labs unit recorded an operating loss in the period of $4.65 billion. https://www.cnbc.com/amp/2024/02/01/metas-reality-labs-loses-4point65-billion-in-q4-ahead-of-vision-pro.html https://www.cnbc.com/amp/2024/02/01/metas-reality-labs-loses...
freddealmeida 3y ago
Why is that important? If you go to a Michelin star restaurant, the input costs are lower than what you pay. But the value is in the creation. The experience itself is valuable. There goes a lot into building a device. More than its parts.
- markus_zhang 3y ago
  The thing is getting an Apple device to use is not as exciting as say 10 years ago. The hype is still here but not that big.
randerson 3y ago
Presumably they are also paying to license third-party patents and other intellectual property for each headset.

50 points by mpweiher 3y ago

A lot of people have told me they'll buy it when it gets down to around $1,000 and I just don't see a way to get there from here. You can drop the second display, make the frame out of cheaper parts, that gets you down to what -- $1,200 in costs? Maybe they get the cost of the chips down? I don't think they'll ever use a cheaper main display -- if anything they'll just keep improving the quality. I don't see this going below $2,000 any time soon.

ildjarn 3y ago
Lots of people would probably pay 2k for a much better headset too. There are multiple ways Apple can attack this.
- empath-nirvana 3y ago
  I think the main reason that they aren't going to focus on cost reduction is that it's not really good enough right now. The people that won't buy it at $3500 won't buy it at $2000, either. Anything north of $1,000, if you're not just selling it to ultra wealthy people who don't care about money, it's got to be a core part of their existence like a phone is, or their job is paying for it. And I don't think the product, as it is, is that. A lot of people wouldn't use it if you gave it to them _for free_.
  - spacebanana7 3y ago
    Unless they can come up with financing options. A lot more people might be willing to pay $150 a month for a new VR headset every couple of years.
  - posix_monad 3y ago
    If you have a small apartment but enough disposable income to drop $2000 on a TV-set (common situation) I can see it be compelling.
    - 65 3y ago
      Can't watch it with other people though. Still need to strap a heavy headset to your face instead of just clicking a button to turn the TV on. I'd still rather have a TV than Vision Pro.
    - deleted 3y ago
      [deleted]
- 65 3y ago
  I would pay $2,000 for great AR/VR glasses - not goggles like the Vision Pro or Quest. Something like the XReal Airs but higher resolution. Why Apple didn't work on this category - glasses - and instead worked on VR goggles, which for years have already been a niche for gaming (something Apple sucks at), is beyond me.
  - apocalyptic0n3 3y ago
    The reports a year ago were that this was their true goal, but they had to postpone AR glasses due to "technical challenges". The Vision Pro was the fallback product that let them enter the market years ahead of where they otherwise would have been able to. 1: https://www.reuters.com/technology/apple-indefinitely-postpones-launch-ar-glasses-bloomberg-news-2023-01-18/ https://www.reuters.com/technology/apple-indefinitely-postpo... 2: https://www.bloomberg.com/news/articles/2023-01-18/apple-postpones-ar-glasses-plans-cheaper-mixed-reality-headset https://www.bloomberg.com/news/articles/2023-01-18/apple-pos...
    - deleted 3y ago
      [deleted]
  - markus_zhang 3y ago
    A side note: it might still be valuable for developers to get one of these -- if we believe that Apple can eventually produce those glasses, I'd assume that experience in developing apps on Vision Pro is still valuable.
  - empath-nirvana 3y ago
    > Why Apple didn't work on this category - glasses - and instead worked on VR goggles Probably because it's a fantasy that can't exist with current technology.
    - 65 3y ago
      It already exists: https://www.xreal.com/us/ https://www.xreal.com/us/
larsnystrom 3y ago
I don’t think they’ll lower the price for Apple Vision Pro, but if they can get good performance out of cheaper components they might release an Apple Vision Air I guess. Not happening anytime soon though.
the_other 3y ago
It's such a niche product with no real world applications. Keep it expensive; no big deal.
- michaelt 3y ago
  Well, there's a vicious cycle with this sort of tech. When sales are low, nobody releases great new applications for it. When nobody releases great new applications for it, sales stay low.
  - bombcar 3y ago
    Apple needs to release a killer app. If even they can’t, then they have a serious problem.
  - politician 3y ago
    Only Apple can release apps for this because no one else can justify the lost revenue that Apple takes off the top in fees.
  - asadotzler 3y ago
    Nah, people have been building amazing content for VR headsets since the 80s. i used to use them in arcades and companies toured devices and content across college campuses in the 90s and we've had Quest for a decade with 6 million MAU today so there's plenty of attempts and it all falls short of mainstream value. Useful for gaming and some VR porn and that's about it. No strap-on dorkbox face computer will ever take off for productivity, not as long as half of office workers spend huge amounts of time on hair an makeup to look nice at the office. No chance they're gonna muss that all up to get another couple screens at their desk when they've got desktops, laptops, tablets, and phones already.
    - the_other 3y ago
      > face computer will ever take off for productivity, not as long as half of office workers spend huge amounts of time on hair an makeup to look nice at the office. The hair and make-up thing seems like it'll be a thing. But the main thing is that it's just not a productive interface. It might be, eventually... but I doubt it. There's very little usability gain in distributing most "work" data in 3d like this. Most of us rarely need to track or navigate around three dimensions of data in real time, and when we do, 2d projections are usually enough.
madeofpalk 3y ago
For comparison, Macbook Air starts at 13" $1100 or 15" $1300. iPad Pro is $800 or $1100 depending on screen size. Both have M2 chips, like the Vision Pro. Functionality wise Vision Pro is a lot closer to an iPad than Mac, but it's also a lot 'higher tech' than either of them. There's no way even a cheaper variant is priced under iPad.
- amelius 3y ago
  Why do you think it is "higher tech" than a laptop?
  - deleted 3y ago
    [deleted]
  - madeofpalk 3y ago
    it is more advanced technology. E.g. the exceptionally dense resolution displays, compared to the displays in laptops. All the sensors and eye and hand tracking.
    - HPsquared 3y ago
      Lots of development cost, in other words, that needs to be amortized.
  - Arn_Thor 3y ago
    Top of the line displays, not one but two advanced CPUs one of which is brand new, a smorgasbord of sensors…
dannyw 3y ago
Huh? $1542 of BOM for a relatively low-volume, first-gen product is actually quite low. With volume, scale, and manufacturing improvements, there is certainly room to keep the same quality and parts and get it under $500 BOM. I'm sure. But you'll need to wait a couple years. My first 4K monitor costed me $2k maybe a decade ago. Today, I can get a better one for $350.
- asadotzler 3y ago
  yes in a decade they can sell the AVP for $500 and not lose money. in a decade the AVP will be a joke and we'll have abandoned this nonsense once and for all (except for the actually useful gaming and porn applications.)
loregate 3y ago
Why don't they just buy a Meta Quest 3?
- ekun 3y ago
  No Apple logo.
- wl 3y ago
  Requires having an account with Facebook.
- mattgperry 3y ago
  Because the screens are shit, comparatively. Also the OS is years behind.
  - asadotzler 3y ago
    the smearing with any head movement on the AVP and the glares or flares or whatever those are have made it unsuitable for movie watching for my movie buff friend who got it because of the "better" screens. He's back to his Quest.
- Retric 3y ago
  Ultimately the Quest is designed as a VR game console and it does that well for an affordable price, but it’s the AR aspects of the Vision Pro that people are excited about. Head to head the Meta Quest 3 has worse screens and cameras, only runs one app at a time, requires controllers, less comfortable while reclined etc. And while Meta removed the mandatory Facebook integration that really damaged people’s perception of the brand. In the end more affordable products sell, but people still lust after supercars not daily drivers.
  - drivers99 3y ago
    > mandatory Facebook That was the reason I was never going to touch any future Oculus product but I didn’t realize they dropped that requirement until now.
  - 3y ago
mattgperry 3y ago
They might carry on improving the quality for the Pro (although this also has limits and diminishing returns) but they don't need to do that if they're targeting a sub $1000 headset, they just need to make these screens cheaper.
stetrain 3y ago
They'll keep improving the quality for the top end product, sure. But screens with today's quality will fall in price over the next few years. Apple loves putting tech they have already paid the initial manufacturing scale-up costs on into lower tier products.

michaelbuckbee 3y ago

The analyst firm seems like they specialize in display panels, electronics etc. so it makes sense that their BOM breakdown doesn't include all the other (quite expensive components) that go into the device. So this number isn't "wrong" so much as specialized.

123yawaworht456 3y ago

>A bill of materials like this doesn't take into account manufacturing, shipping, or marketing, nor does it factor in the cost of research and development. it also (likely) doesn't take into account the massive discounts you get at scale and Apple's famously optimized supply chain. I wouldn't be surprised if the real BOM is sub 1K.

deleted 3y ago
[deleted]
danpalmer 3y ago
I'm not so sure. Taking the displays at $228, these are specialist components that require integration work – I don't think one can walk into the Sony offices and ask to buy one (1) of them. That would then suggest that the "sticker price" is accounting for a certain level of scale, and while Apple are high volume in general, this device is not particularly high volume. Also volume discounts on components such as this don't tend to be that significant as to achieve a 33% reduction on price.
- notso411 3y ago
  [dead]
acdha 3y ago
Isn’t that this company’s entire business? I’d be surprised if they were anywhere that far off on the first question most people would have, and most of those parts are quite specialized so you aren’t going to see volume discounts unless the market grows significantly.
hnbad 3y ago
The Vision Pro doesn't exactly seem to have reached what I would normally think of as mass production so I wouldn't be surprised if the scale doesn't really work for them yet. That said, with raw numbers like this I always have to think of the teardown of the Juicero which revealed that it used numerous custom parts that certainly made it very expensive to manufacture: https://blog.bolt.io/juicero/ https://blog.bolt.io/juicero/ The catch with Juicero of course is that while the parts were very expensive, it could have been made much cheaper by using standard parts instead of the custom ones. I'm not saying that's the case here but it's worth taking these things with a grain of salt.

fafhnir 3y ago

A picture from Rubens is only 100$ in Materials, but this is not the whole story ;)

loueed 3y ago

Sony has a monopoly and limited production on MicroOLED, which is why the displays are the most expensive part of Vision Pro. Apple is reported to be testing displays from BOE, Apple will be able to negotiate better prices once Sony loses their monopoly. If Vision Pro 2 is planned for 2027, we might see Apple use Samsung eMagin OLED.

asadotzler 3y ago
BOE and Samsung and Japan Dispay are in market or ramping now.

hirako2000 3y ago

In case some still haven't realised, Apples has become mostly a status brand. Not an innovative, way ahead in quality maker. With a good touch of status. That flavour mix has died long ago along with Jobs. What's left is a money making machine sitting on its legacy. They are in the prada, gucci business. And have more cash in hand than most fortune 500 have in yearly revenue. Even if some combine. They can launch series of product that flop. They can RnD many cool things catering to the very rich, break even. At loss even. They could make new generations vision thingy with a 3k or more market, and at loss, at profit anyway in the end by selling specialised apps for other thousands of dollars a piece to feed the 0.01%, those are running out of ideas on how to spend their money. Apple is the shadow of itself 15y back, but got the power to continue surfing on that market for status money making business for years.

hasty_pudding 3y ago
Their products are still far and away better quality wise than most other brands though.
toenail 3y ago
> In case some still haven't realised, Apples has become mostly a status brand. Yet they sell a phone that generates revenue for them and don't have to sell all my personal data to advertisers.
- ndjisjia 3y ago
  Apple has a multi billion dollar advertising business. What makes you so sure they don't use personal data for ads.
hkpack 3y ago
Wow, I am not sure how anyone can seriously write this without doubting himself even once. I get it, you provably not their user, but you can at least appreciate that people are using Apple not only for the status. My parents are using iPhones after so many android phones and cannot be happier. My mother is using iPad with keyboard after abandoning laptops and PC and couldn’t be happier. We use Apple in my family, because of the tight integration and ecosystem. We can share photos and videos easier than ever, FaceTime, collaborate, etc… Even new feature with desk sharing in FaceTime is amazing and allow me to help my kid with homework from far away. My M2 Macbook Pro is the best laptop I’ve ever owned by high margin. Tight interaction with iOS devices, Apple TV and Homepods is just amazing. In your world Apple is a status symbol, but in mine - it solves real problems for my whole extended family. Not everything is perfect but saying what you’ve said is just ignorant.

zokier 3y ago

I wonder how they got that $240 figure for SoC, I would have thought the marginal cost of a chip to be much much smaller? Of course attaching any price tag to in-house part is going to be problematic.

stephen_g 3y ago
That’s basically the problem with this kind of analysis, these are basically guesses, the real cost for that and any of the custom components could be 50% less or 400% more… What costs are they assuming is included in the BOM cost of the SoC? Mask sets and manufacture? NRE or no NRE? All of this makes a huge difference, but they don’t actually know what Apple pays for any of it…
asadotzler 3y ago
An SOC that Apple's selling at massive volume too via iPad or some other device, right? So no one can blame the hundreds of thousands, low volume of AVP for that steep price.

retskrad 3y ago

Apple was ahead of the curve and influential in the 2000s, but today, they seem to have run out of steam. They just released a $3500 head VR headset that has no purpose and is searching for a problem to solve and which is DOA for at least 5 more years and they are years behind the others in LLM's, which is literally changing the world akin to the iPhone. The company is so inert that they can't even get the Apple Car out. Frankly, Apple's current market cap baffles me. While Tim Cook is a competent manager, he doesn't quite match up to Satya Nadella. Satya consistently stays ahead of the curve, reminiscent of Apple's prowess in the 2000s. He dissolved Microsoft's AR/VR division months before the explosion of ChatGPT and LLMs and redirected Microsoft's focus to fully embrace LLMs. Managing a colossal company like Microsoft, it's truly impressive how swiftly he can pivot its direction. In contrast, Tim Cook appears more like a Sundar Pichai-style CEO, adept at weathering storms and maintaining stability. Investors are taking notice, and that's why Microsoft has not only maintained its position but surpassed a $3 trillion valuation, while Apple has faltered. I wouldn't be surprised if Nvidia eventually surpasses Apple in value too.

danielvaughn 3y ago
Microsoft's comeback in recent years has been very impressive to witness. Although I still can't make the jump to Windows, I'd at least be open to it at some point. Last time I booted a Windows machine, it showed me an ad on startup. Get rid of shit like that and I'll consider it.
- pch00 3y ago
  If you live in the EEA you'll soon be able to get a de-crapified Windows 11 direct from Microsoft: https://arstechnica.com/gadgets/2023/11/europeans-can-soon-strip-bing-edge-other-microsoft-cruft-from-windows-11/ https://arstechnica.com/gadgets/2023/11/europeans-can-soon-s...
- veidr 3y ago
  That shit is their bread and butter, though. They will literally never get rid of it, they've spent the past 5 years doubling down on that, and then doubling down on it again. Their message is clear: if you don't like it, fuck off. I have to have one Windows machine for certain shit, and while you can get rid of a lot of the ads only once, certain ones, like in-UI ads for Microsoft Teams, just keep coming back like Terminator. There's no way to get rid of them. At best, you can get rid of this specific version of the ad, but they will add a new "different" one in the next OS update. But Apple is on their six. My kids recently got old enough to need their own accounts on computers, and it is this hellish whack-a-mole with ads for Apple Music. Even though I think Apple is about as good as we'll ever get from a for-profit corporation, it's still deplorable. You will never not get ads if you cede control of "your" hardware to some corporate jackasses.

tartuffe78 3y ago

These comments will probably be quite amusing in 3-4 years time.

anshumankmr 3y ago
how so?
- bombcar 3y ago
  No wireless. Less space than a nomad. Lame. But it could also be a quiet flop if they never get any traction because of a lack of apps.

whywhywhywhy 3y ago

What would the cost be if the designers hadn't wanted to play with curved glass? Would the product be that different without the glass front and second screen on the front? Would it have actually been better because it would be lighter, cheaper and with better battery life?

acdha 3y ago
> Would the product be that different without the glass front and second screen on the front? Well, the article has the cost savings at under 5%. Battery would probably be more but I’d be quite surprised if it was a game-changer: the processing needed to make XR work is just expensive and Apple has one of the best design teams in the industry so we can safely assume that they wouldn’t have missed an opportunity for a notable battery life improvement.

tdudhhu 3y ago

Also one big thing that is often overlooked is aftersales. I think Apple products are often overpriced, but using the BOM to estimate margins is kind of stupid.

djyaz1200 3y ago
That's a good point for other Apple products, but in this case, many other companies are not supporting the "platform" (Netflix, Spotify, YouTube); this may diminish the LTV of Vision Pro and its successors. I mention successors because the obvious next step is to put a $600 fancy detachable headband on an iPhone and call it Apple Vision (not pro). It may be that Apple's abusive track record in the App Store ends up getting them locked out of whatever the next thing is since it's clear that gated, extractive monopolistic practices are core to their identity and business model.

drexlspivey 3y ago

Honestly the whole concept of having 2 screens, one showing you what’s directly behind it and another one showing the other person your eyes (also directly behind it) seems so wasteful. There needs to be some technology advancement where you can overlay all the safari windows and apps onto a real see-through screen before this thing gains any real traction. This way you could get rid of 2 screens, a bunch of cameras, a dedicated chip that does the pass-through, the battery pack, half the weight and half the cost (or more). I believe Meta is trying something like this with their Ray Ban glasses.

cubefox 3y ago

It's interesting to compare this to the aggressively priced Meta Quest 3, which sells for $500: > they estimate that the components of the Meta Quest 3 alone cost an estimated $398 per headset. Combined with manufacturing costs, the price should be around $428 https://mixed-news.com/en/meta-quest-3-bill-of-materials-analysis/ https://mixed-news.com/en/meta-quest-3-bill-of-materials-ana... Related: > In its fourth-quarter earnings report Thursday, Meta said its Reality Labs unit recorded an operating loss in the period of $4.65 billion. https://www.cnbc.com/amp/2024/02/01/metas-reality-labs-loses-4point65-billion-in-q4-ahead-of-vision-pro.html https://www.cnbc.com/amp/2024/02/01/metas-reality-labs-loses...

freddealmeida 3y ago

Why is that important? If you go to a Michelin star restaurant, the input costs are lower than what you pay. But the value is in the creation. The experience itself is valuable. There goes a lot into building a device. More than its parts.

markus_zhang 3y ago
The thing is getting an Apple device to use is not as exciting as say 10 years ago. The hype is still here but not that big.

randerson 3y ago

Presumably they are also paying to license third-party patents and other intellectual property for each headset.