Apple's VR/AR headset could feature $1,500 worth of parts
Nobody is predicting that Apple’s upcoming mixed-reality headset will be cheap — even by the company’s premium standards. It’s expected to launch with an MSRP of $3,000 — three times the price the Meta’s Quest Pro sells for (albeit factoring in the permanent $500 price cut).
But it appears Apple won’t have much choice if it wants to ensure any kind of profit on each unit. A number of reports out of Asia tot up the estimated bill of materials (BOM) for the upcoming headset, with totals ranging from $1,300 to $1,600.
While that’s still obviously around half the predicted MSRP of the headset itself, that doesn’t factor in Apple’s research and development, which, according to Bloomberg, have been substantial, running at over $1 billion a year.
And to sell at $3,000, the margins would still be thinner than the company’s best-selling iPhone range, with recent estimates pinning the $1,099 iPhone 14 Pro Max’s production cost at around $464 per unit.
Apple VR/AR headset: What parts cost the most?
With that caveat out of the way, how did the various analyses reach their estimated costs? The short answer is that the headset is going to be an extremely sophisticated product, and if you want components like multiple micro OLED screens, cameras and chips, then prices spiral fast.
The most detailed report comes from Minsheng Electronics, which breaks the cost down on a component-by-component basis.
According to the report, the most expensive parts are the micro OLED displays at $280 to $320, followed by the headset’s 14 camera modules at $160. The two chips come in at around $120 to $140, and assembly is estimated to cost $110 to $120.
Those are the triple-figure costs, but a series of double-figure parts (a $95 frame, a $70-$80 lens system and an $80-$90 3D sensor to name just three) bring the total cost of raw components to around $1,400. Factor in post-shipment and transport costs and the final bill to Apple is “conservatively estimated to be within $1,600.”
A second report from Wellsenn XR, captured by XR Daily News, includes similar numbers for a total of $1,509. Here, the two screens are once again the most expensive components, this time accounting for $350 apiece for a total of $700.
A final report highlights two more analyses with lower estimates of $1,290 and $1,300. However, neither of these seems to take shipping into account, which could bring the totals closer to the other estimates.
With a high cost of entry just to break even, it’s perhaps no wonder that those inside and outside of the company are skeptical whether Apple's take on mixed reality can really be the next big thing. Then again, betting against Apple in the last decade has proved a bad move, and there are still reasons that the headset could defy the critics in the long run.