The global smartphone market is expected to shrink by 2.1% in 2026 due to rising costs of chips and memory, which are driven by AI demand, leading to higher device prices and shipment declines for major brands like Apple and Samsung, while low-end phones are impacted most severely.
The Apple Vision Pro VR headset is expensive to produce, with nearly half of its $3,499 price tag going towards costly components, according to a report by Omdia. The bill of materials for each headset is estimated at around $1,542, with the micro OLED displays from Sony being the most expensive element. Despite the high production cost, Apple may not make much profit from the initial device, but future models and economies of scale could help reduce costs and increase profitability.
Analyst firm Wellsenn estimates the component costs of Meta Quest 3 and Apple Vision Pro. The most expensive component in Quest 3 is the Snapdragon XR2 Gen 2 chipset at $90, while the near-4K OLED microdisplays in Vision Pro cost a staggering $350 each. The total component cost of Quest 3 is estimated at $400, while Vision Pro's component cost is over $1700. These estimates do not include research and development costs, and securing OLED microdisplay supply remains a challenge for Apple.