Why Apple Will Sellout Of Vision Pros In 2024

The Vision Pro headset produced by Apple is expected to be available in the market by 2024. Despite its estimated cost, it may run out of stock due to its high demand. This is depicted in the photo illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images.

In June 2023, Apple launched the Vision Pro headset, and those who had the chance to try it out, including myself, were impressed by its abilities and characteristics. Nevertheless, we all raised concerns about its hefty price tag of $3,500, which made it more suitable for enterprises and business users rather than general consumers at the outset.

A different item was really pricy when it first hit stores, but ended up being a big hit and selling way more than the company thought it would. This could be a hint that Apple's Vision Pro might also do really well, even when it's first released.

Back in 1981, I was assigned to analyze the PC market and make a foresight regarding the possible triumph of personal computers. My higher-ups and customers, including IBM, challenged me to come up with some estimated figures on the market demand for their newly-released IBM PC during its debut year.

The initial blueprint for IBM's latest personal computer included information on the company's previous goals and predictions. It estimated that they would sell about 220,000 units during the computer's first three years of availability, with a starting cost of $1,565 (which presently corresponds with $5,040). But, IBM went beyond their forecast and sold 750,000 computers, surpassing their expectations by about 800%, only in 1983.

During our time working for IBM, we developed a market demand pyramid which showcased the different types of buyers. At the pinnacle of this pyramid were the "Need Now" buyers who were highly motivated to purchase PCs regardless of cost. These individuals required the technology immediately, particularly for financial services. The first generation of spreadsheet programs, such as Visicalc, made PCs indispensable for this purpose. In the year 1983, IBM's success in selling 750,000 IBM PCs was largely due to the launch of an impressive spreadsheet program called Lotus 1,2,3.

In the pyramid structure of buyers, there were a group known as early adopters located beneath the highest tier. Early adopters were typically individuals with a passion for technology, engineers, and business owners who would utilize the products if it was within their financial means. This particular tier of the pyramid saw a surge in growth when the IBM PC clones became available for purchase towards the end of 1983 and beginning of 1984.

In the pyramid structure, the third tier consisted of individuals known as fast followers. These individuals typically operated within medium or small-sized businesses and were attracted to cheaper IBM PC clone alternatives. New software packages began to emerge by 1985. These packages included word processors, database software, and even high-end educational programs that were highly useful to the broader audience. This layer helped to increase the PC's audience significantly, although the majority of people who purchased PCs continued to be businesses or individuals with an interest in high-quality education.

At the base of the pyramid, there was a big group of people. We thought that they wouldn't start using technology until the end of the 80s or the beginning of the 90s. We called them the consumer audience, and that's exactly who they were. In the early 90s, Apple brought out CD ROMs, multimedia computing became popular, and PC gaming became a big thing. There was also more educational content available, and the cost of buying a PC that wasn't from Apple became much cheaper.

Using the pyramid model, we can analyze the anticipated buyers of Apple's Vision Pro headset. The first group of buyers would be those who have an urgent need for the product - "Need Now" buyers. This commonly includes developers who will facilitate the device and corporate clients who wish to use it in developing spatial computing applications useful for employee training, onboarding and other business programs. Additionally, the group will incorporate creators who believe that Vision Pro is an indispensable foundation to advance their area of expertise.

Apple is collaborating with developers of games and popular professional sports leagues, including NBA, NFL, and MLB, to create specific sports applications that will be available once their headset is released in the beginning of 2024.

Such applications are likely to increase the desire of tech enthusiasts who can financially afford such devices and will eagerly wait for an opportunity to be the initial group of individuals within their social circle to possess the Vision Pro headset.

The initial purchasers of the Vision Pro in 2024 are expected to be the first two tiers of the pyramid. The remaining two tiers are likely to follow suit once Apple reduces the prices and releases more specialized apps for the headset which could potentially happen in 2025 or 2026.

I foresee that all the Vision Pro devices made by Apple in 2024 will be sold out. Based on my conversations with the supply chain, it seems that Apple has the capacity to manufacture anywhere between 250,000 and 400,000 units in the same year.

If you closely examine the highest two tiers of the consumer pyramid, you may estimate that this group presently comprises of more than 10-15 million individuals across the globe. This group also contains businesses that may have a pressing need for Apple's Vision Pros.

It's a fact that many people are eagerly anticipating the release of the Vision Pro. It's understandable that those who are eager to purchase new technology right away, known as the "Need Now" and "Early Adopter" crowds, may not be deterred by its high price of $3,500 once it's released. And since Apple has the capacity to manufacture a maximum of 400,000 units at a time, I predict that all Vision Pro units made in 2024 will be sold out.