Apple AR/VR headset manufacturing cost apparently exceeds $1,500

Apple is set to reveal its mixed reality headset at WWDC 2023, and rumors suggest it will come with a price tag of as much as $3,000. Apple's manufacturing cost is notably higher than other headsets already on the market. Chinese analysts say the manufacturing cost per unit is around $1,500.

The headset is expected to feature Apple's M2 chip, 12 GB of RAM, 512 GB of SSD storage, Wi-Fi 6, and Bluetooth 5.3 for connectivity. The new report shows that the components cost around $1,400. The total manufacturing cost per unit reaches $1,600 when shipping costs are factored in.

The OLED displays, anticipated to be the most expensive components, are estimated to cost between $280 and $320 per unit. Additionally, the camera parts with 14 lenses contributes approximately $160 to the cost.

image via Apple Insider

An XR device expert, Brad Lynch, highlighted that the Meta Quest Pro's manufacturing cost is half that of Apple's headset. The Meta headset was initially priced at $1,500 but later reduced to $999, indicating a profit margin of around $250 per unit.

It is worth noting that it costs Apple approximately $500 to manufacture an iPhone 14 Pro Max, which retails at $1,099. This aligns with the speculation that the mixed-reality headset will cost $3,000. Sources familiar with the matter reveal that Apple has invested over $1 billion annually in headset development. However, the company has reportedly revised its sales expectations for the product, with analysts projecting sales of around 500,000 units in its first year.

While this report suggests that Apple is creating a premium headset with advanced technologies, the product's success remains to be determined. Even after more then a decade, the market for mixed reality headsets has yet to prove its widespread appeal, and it remains to be seen if consumers are willing to invest such a substantial amount of money in this new product.

Sources: Brad Lynch, Minsheng Electronics (Chinese)

Apple AR/VR headset manufacturing cost apparently exceeds $1,500