Apple reportedly already working with Foxconn on cheaper second-generation AR headset

Apple is expected to unveil its first-generation AR/VR headset hardware as soon as WWDC in June. But the first-generation device is expected to be packed with cutting-edge tech, like high-res displays, and many cameras and sensors — all those premium components come at a cost. The rumored price for “Apple Reality Pro” is $2,000-$3,000.

However, the rumor mill believes that Apple is targeting a cheaper — more consumer-friendly — device for the second generation. In fact, a report from Nikkei today says that Apple is already working with Foxconn on production planning for the cheaper headset.

Nikkei says that Apple is using Luxshare to build the first-generation AR/VR headset, notable as it rarely uses non-Foxconn manufacturers for version 1 products. Luxshare already participates in assembly of iPhones, Apple Watch, and AirPods.

One of the most expensive parts in the first headset’s bill-of-materials will be the displays. Apple is believed to be using high-resolution micro-OLED panels, and it needs two displays per headset unit – one for each eye. Each panel could cost around $150 to manufacture according to today’s Nikkei report, with the high price due to the fact yields are still relatively low.

Apple is targeting a lower price for the second-generation model, and some of the cost savings will arise through more efficient production. Nikkei says Apple has tasked Foxconn with increasing automation in the headset assembly process to reduce build costs. The work is being done ‘in parallel’ with the Reality Pro launch.

This is by no means the first time we have heard about the idea of a cheaper headset in the offing. Firstly, it just makes sense that Apple will need to bring the cost down to make the product more appealing to more people — a $3K price tag is simply too high to attract a wide customer base.

In January, The Information said Apple’s second-generation headset will use cheaper materials, have fewer sensors, and possibly lower-resolution displays. Trademark filings suggest the cheaper headset could be branded “Apple Reality One.”

We expect the Reality Pro to debut sometime this year, the Reality One could follow next year or early 2025.