Headset Economics — Apple Vision Pro’s components cost $1,542—but that’s not the full story
The OLED displays account for more than a third of the component costs.
Components and Costs
Research firm Omdia has provided estimates on the cost of materials for Apple's Vision Pro headset. According to the analysis, the total bill of materials is around $1,542. However, the consumer price for the headset can be as much as a thousand dollars more, depending on the configuration chosen by the buyer.
The most expensive component in the Vision Pro headset is its dual micro-OLED displays, costing $456. Another external display used for EyeSight costs around $70. This means that the displays account for about 35 percent of the total cost of materials.
The second most expensive category is silicon, with the M2 system-on-a-chip and R1 processor estimated to cost $240, making up just over 15 percent of the total cost.
Profit Margins and Future Costs
It's important to note that the cost of materials does not include manufacturing, shipping, marketing, or research and development costs. While the estimates provide insights into component costs, they do not reveal the exact profit Apple earns on each Vision Pro sold.
Apple has a history of maintaining substantial profit margins on its hardware products, but it's unclear if Vision Pro will follow suit. Analysts expect some of the costs to decrease over time.
Ultimately, only Apple knows the true profit margins for Vision Pro, and it's likely the difference between the price and the bill of materials is significantly less than some might assume.
Conclusion
While the cost of components for Apple's Vision Pro headset is around $1,542, this does not provide a complete picture of the headset's economics. Factors such as manufacturing, shipping, marketing, and research and development costs need to be considered.
The most expensive components in the headset are its micro-OLED displays, followed by silicon. It remains to be seen how much profit Apple earns on each headset sold, but it's expected that some costs will decrease over time.
It's important to remember that the price tag of the headset does not solely reflect the cost of materials. Apple's profit margins on its hardware products have historically been substantial, although the exact margins for Vision Pro are unknown.
