Apple is tapping into the supply chain in mainland China for its highly anticipated mixed reality (MR) headset, the Apple Vision Pro. Recent reports indicate that a significant 60% of the components for the Vision Pro will be sourced from Chinese suppliers, a significant increase over the iPhone 15 series. Launched into mass production in December, Apple has set an ambitious goal of selling 1 million units in 2024, with plans to reach 10 million units in the third year.
Sourcing 60% of its components from China marks a marked departure from iPhone production trends
The estimated cost of the Apple Vision Pro hardware is around USD 1700, with Lingyi Intelligent Manufacturing, a well-known Chinese supplier, playing a crucial role by providing components worth USD 250-300. These components include heat dissipation modules, headbands, eye masks, and nose pads. Lixun Precision, another key supplier, will handle exclusive OEM assembly, providing components costing approximately USD 150-200 per unit.
This change is a departure from Apple’s recent efforts to diversify its supply chain outside of China. The increased participation of Chinese suppliers, especially in the production of the Vision Pro, is in stark contrast to the fact that only 2% of the hardware for the iPhone 15 series was sourced from China.
Chinese supply chain companies demonstrated great flexibility and capabilities during the development and prototyping stages of the Vision Pro headset, playing a crucial role in winning Apple’s favor. Apple CEO Tim Cook has publicly expressed his preference for continental supply chains, emphasizing their greater involvement in innovative products such as Vision Pro.
While Apple’s iPhone production has seen a decline in the share of components from mainland China, the Vision Pro signals a strategic shift in the supply chain to the country. This move will benefit Apple by reducing production costs and potentially allow the MR manufacturer to lower the overall cost of the final product.
