Renowned Apple analyst: Vision Pro's demand in the U.S. market has significantly slowed down, with no abnormal return rate.

Renowned Apple analyst Ming-Chi Kuo from TF International Securities wrote that the demand for Apple's Vision Pro in the U.S. market has significantly slowed down, with the current shipping time improved to 3-5 days. It is estimated that a new model with significant changes in specifications for Vision Pro may not be mass-produced until 2027. Based on the shipping time, Kuo pointed out that the demand in the U.S. market has slowed down significantly. The shipping time for Vision Pro has now improved to 3-5 days, which means delivery will be in early March. After pre-orders opened on January 19th, the shipping time was set for early March, indicating that although early adopters purchased actively after pre-orders opened, the demand quickly declined thereafter and has not improved since. Regarding the return rate of Vision Pro, Kuo mentioned that based on his investigation of the repair/refurbishment line, the return rate for Vision Pro is less than 1%, which is not unusual. Among users who returned the product, about 20-30% did so because they did not know how to set up Vision Pro. Kuo believes that unless Vision Pro reduces its price or offers more appealing applications, the growth of shipments in the U.S. market will be limited. The estimated shipment volume in the U.S. market this year is around 200,000-250,000 units, better than Apple's initial estimate of 150,000-200,000 units, but still considered a niche market. In terms of the global release schedule forecast, Kuo still maintains the prediction that Apple may release Vision Pro in more countries before this year's WWDC. With limited growth potential in the U.S. market, an improved supply chain could facilitate an earlier global release schedule, but the actual release timing depends on Apple adjusting software to comply with regulations in other countries. Regarding the expansion of the supply chain, Kuo pointed out that in the past month, several suppliers with initially small capacities have expanded production from 500,000-600,000 units to 700,000-800,000 units this year. However, this scale still caters to niche products. Apart from the better-than-expected demand from early adopters in the U.S. market, another main reason for Apple's request for supply chain expansion is to reduce shipping times after the global release. Nevertheless, production capacity does not always equate to shipment volume. For example, in the case of the iPhone, the annual assembly capacity is currently 250-300 million units, but the actual shipment volume is significantly lower. There are various speculations in the market about the new models, to which Kuo commented: The market generally expects Apple to launch a lower-specification (such as reducing the number of cameras, removing Eyesight, etc.) budget version and an upgraded model. However, my latest investigation shows that Apple has not officially initiated the two aforementioned projects. The new Vision Pro project officially initiated by Apple is expected to be mass-produced in 4Q25-1Q26, with Foxconn obtaining the new product introduction (NPI). This new project focuses on improving supply chain production and management efficiency, rather than changing specifications. This new project may reduce costs, and based on the latest plans, the changes in specifications are limited, so it is speculated that the user experience may not differ from the current models. Apple has been collecting user feedback to plan the blueprint for the Vision Pro product. It is currently estimated that the new model with significant changes in specifications may not be mass-produced until 2027. A summary of the current situation of Vision Pro is as follows: Since the pre-order of Vision Pro, everything has been in line with previous expectations. The only aspect that exceeded expectations is the higher number of early adopters than expected and the expansion of suppliers. However, even with the current demand (estimated shipments in 2024 raised to 600,000-700,000 units from the previous 500,000 units) and production scale, Vision Pro is still a niche product. For Apple and the vast majority of suppliers, the investment theme of Vision Pro currently has a very limited impact on stock prices. The three key factors for Vision Pro to transition from a niche product to a mass-market product are applications, pricing, and comfort of wearing. Improvements/changes in these three key areas will be the focus of future observations.