Apple is reportedly shifting its mixed reality (MR) device strategy by abandoning the development of its existing high-end Vision Pro headset in favor of launching an affordable MR device expected to debut next year. According to a report from Economic Daily News, it’s rumored that Foxconn is likely to replace Luxshare as the manufacturer for Apple’s affordable MR device, although Foxconn typically refrains from commenting on order specifics and client relationships.

Alongside this move, Apple reportedly plans to incorporate AI capabilities into the product, which is anticipated to significantly boost sales of the affordable MR device. Per the sources cited by the same report, they are optimistic that companies like Genius Electronic Optical (GSEO) and GIS Industries are poised to benefit from the opportunities.

According to a report from tech media outlet The Information citing sources, Apple initially planned to release two versions of the Vision device, akin to the standard and Pro versions of the iPhone. However, Apple is said to have informed at least one supplier to halt the development of the next-generation high-end Vision Pro headset.

Recently, Apple has planned to launch the USD 3,500 Vision Pro in eight new markets, including China and Japan. However, The Information, citing a source from a supplier, reported that after receiving Apple’s forecast of weakened demand for the Vision Pro by August, the supplier cut production by half in May.

The sole supplier, which has no competitors, produced approximately 460,000 Vision Pro components in the first four months of this year and plans to produce an additional 100,000 components from May to August. This suggests that Apple expects to produce at most around 500,000 units this year, with no significant production increase before August.

The Information revealed that Apple started developing a more affordable version of the Vision product in 2022, internally codenamed “N109.” According to the report, Apple is also trying to reduce the weight of the budget version by at least one-third compared to the Vision Pro. It is further reported that Foxconn will replace Luxshare as the manufacturer for Apple’s affordable MR device.

Industry sources cited by the same report indicated that Apple has already announced Apple Intelligence, confirming that AI applications will be integrated into all future devices. The next generation of MR devices, featuring more AI functions and applications along with a more affordable price, is expected to boost demand and significantly increase shipment volumes, benefiting Foxconn.

Other Taiwanese collaborators are also poised to benefit. GSEO has gradually been obtaining orders from the supply chains of Sony, Meta, and Apple, providing lenses and components for VR/MR headsets. GSEO expects VR-related applications to account for 20-30% of its revenue this year.

GIS plays a crucial role in the Vision Pro supply chain, handling the most technically challenging lens bonding tasks. Its production base is located in Chengdu, China, and it is generally anticipated to be part of the supply chain for Apple’s affordable MR headset as well.

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(Photo credit: Apple)