Apple’s Vision Pro Headset Stalls as Production Halts

Apple US0378331005

Apple's ambitious foray into spatial computing has hit a significant roadblock. Production of the high-end Vision Pro headset has effectively ceased, with manufacturing partner Luxshare halting assembly lines in 2025. The device's commercial trajectory reveals a stark decline: fourth-quarter deliveries plummeted to just 45,000 units, representing an 88% collapse compared to the prior year. In a parallel retrenchment, Apple slashed marketing expenditures for the headset in the United States and United Kingdom by more than 95%.

Market reception indicates that the product's $3,499 price tag and noted ergonomic shortcomings proved insurmountable barriers to widespread adoption. Initially positioned as the cornerstone of a new hardware category, the Vision Pro now stands as a substantial failed investment. The sales figures narrate a clear story—from 390,000 units sold in its inaugural year to a mere 45,000 in Q4 2025, demonstrating decisive market rejection. The central question for investors is the extent to which this setback will impact the company's overall stock momentum.

Institutional Sentiment Presents a Mixed Picture

The behavior of major investors offers conflicting signals. Andrew Hill Investment Advisors aggressively increased its stake by 260.8% during the third quarter. Conversely, Berkshire Hathaway recently made notable reductions to its position, and GLOBALT Investments LLC trimmed its holdings by 3.7%. All eyes are now on the quarterly earnings report scheduled for January 29. Market consensus anticipates earnings per share to land between $2.65 and $2.67. The management's forward guidance for the coming year, particularly concerning the hardware launch roadmap and the profitability of the services division, will be scrutinized.

Analyst Perspective: Limited Upside from Current Valuations

Equity researchers express caution regarding near-term share price appreciation. Raymond James resumed coverage on January 2 with a "Market Perform" rating. Analyst Srini Pajjuri cited current valuation as the rationale for this neutral stance, noting that a price-to-earnings ratio of 36.42 on a $4.02 trillion market capitalization offers little room for multiple expansion.

While the iPhone 17 cycle is performing solidly—fueling a share price advance of over 32% in the past six months—this strength is believed to be already reflected in the stock. The stability provided by Apple's installed base of 2.4 billion active devices is acknowledged, but analysts suggest it does not justify further price gains at present levels.

Potential iPhone 18 Delay Adds to Uncertainty

Further complicating the outlook are reports suggesting a potential delay for the standard iPhone 18 models, possibly pushing their launch into early 2027. Production challenges linked to new display and camera technologies are cited as the cause. Such a deviation from the established annual release cadence could disrupt revenue planning for fiscal 2026.

Key Financial Highlights:
- Record annual revenue of $416 billion for fiscal 2025.
- Services segment revenue reached $28.75 billion in the last quarter.
- The Services division maintains a gross margin of approximately 75%.
- Consensus estimate for Q1 2026 revenue stands at $138.25 billion, an 11% year-over-year increase.

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