Expensive displays
The most expensive component is the pair of micro OLED displays, according to estimates by research firm Omdia, in a report from CNBC. These 1.25-inch displays with very high resolution are estimated to cost Apple $228 each from Sony.With two displays per headset, that’s $456 just on the screens.
The micro OLED displays have over 3,000 pixels per inch density compared to around 460 ppi on the iPhone 15’s screen. This allows for sharper and more realistic visuals. The tiny OLEDs use a silicon backplane for the dense pixels rather than glass. Producing the screens requires cutting-edge manufacturing capabilities.
“Apple has a massive effect on the display industry,” said Omdia analyst Jay Shao. He expects costs for the Vision Pro displays to decline in coming years as more suppliers compete.
Powerful processors
After the displays, the next most costly components are the processors – Apple’s new M2 chip and the custom R1 chip. Apple designed the R1 specifically to handle all the video, camera, sensor, and input processing needed for augmented and virtual reality applications.
The chips add significantly to the cost but are key to delivering the experience Apple wants from the Vision Pro.
Cost likely to come down
These bill of materials estimates only cover parts costs from suppliers and do not include all the R&D, manufacturing, packaging, and other costs that make up a product’s final pricing. As a first-generation and relatively low-volume product currently, costs are higher.
But as with past technologies like OLED iPhone displays, Apple’s leverage and scale with suppliers help bring down future pricing through competition and efficiencies. Display costs, in particular, are expected to decline over the next few years.
Apple CEO Tim Cook has emphasised the “incredible amount of technology” in Vision Pro that justifies its premium $3,499 starting price. With over 5,000 patents behind its innovations and breakthroughs in areas from displays to spatial mapping, Apple aims to push the boundaries of what’s possible.