Apple’s upcoming AR headset is rumored to have a price tag of $3,000 upon release in a few months. However, the company is expected to enjoy nearly 100% gross margins per unit sold. Despite the high manufacturing costs indicated by the Bill of Materials (BoM), Apple stands to make significant profits from the device.
According to a Twitter post by Brad Lynch, as reported by XRDailyNews, the Bill of Materials for Apple’s AR headset is expected to range between $1,500 and $1,600. These estimates were obtained from a Chinese report that also revealed the anticipated specifications of the mixed-reality headset, which is fortunate.
Considering these numbers, Apple is projected to have an almost 100 percent gross margin. However, when factoring in additional expenses like research and development, marketing, and various variables, the company’s net margin could be significantly lower. It’s no secret that Apple commands premium prices, allowing them to generate billions in revenue each quarter. Nevertheless, the key to commercial success lies in selling products in large quantities.
According to the report, the AR headset is expected to ship only between 400,000 and 500,000 units in the second half of the year. Based on these estimates, Apple would earn approximately $1.5 billion from the headset’s launch, which falls short in terms of commercial success compared to the company’s other products. Among the individual components, the most costly are the microLED panels, with an estimated price range of $280 to $320.
The 14-lens camera arrangement stands as the second most expensive component, with a price of $160. Apple is expected to incur costs of $120 to $140 for each of the two chipsets sourced from TSMC. As for the specifications, the AR headset is set to feature the M2 chip, although details about the secondary SoC remain unknown. Additional information reveals that the device will offer 12GB of RAM and a 512GB SSD, along with Bluetooth 5.3 and Wi-Fi 6 connectivity.
The limited number of shipments for the AR headset could be a contributing factor to the high Bill of Materials (BoM) range of $1,500 to $1,600. If the primary goal were to increase volume, Apple could potentially lower the pricing considerably. Interestingly, the company has a strategy in place to address this issue. They plan to launch a more affordable successor to the AR headset in 2025, which will be offered alongside a premium version of the device.
Major Chinese Analysts are reporting the Apple HMD's Bill of Materials cost to be about 1500-1600 US Dollars
This is about double the reported BoM for the Quest Pro (which was 800 dollars including the controllers and charging pad)
— Brad Lynch (@SadlyItsBradley) May 18, 2023
Image Credits: Antonio De Rosa