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Apple analyst Ming-Chi Kuo weighs in on Apple's upcoming XR Headset and clarifies Luxshare's involvement in designing 2nd-Gen Headsets

1 cover - image from Ming-Chi Kuo report

According to new Tweets from Ming-Chi Kuo this morning, he first rehashed his December 2022 predictions of Apple's XR headset and then touched on the prediction that has been recently circulated  in the Apple news community, that Apple will introduce their first headset at WWDC23. Kuo states that this is unlikely to materialize and that Apple is likely to  launch it alongside iPhone 15 in 3Q23 is rising.

Yet the original rumor was that Apple would introduce the XR headset to developers so that they could start development of apps for the new device. No one was expecting Apple to actually "launch" the device at the event. So Kuo's Tweet was a bit odd.

Yesterday Nikkei Asia reported that Apple chose Chinese supplier Luxshare to assist in the development of next-gen XR devices. Today, Apple analyst Ming-Chi Kuo weighed in this development in a new research report published on Medium.

Kuo: Here are my related survey findings and predictions

  • It’s expected that Pegatron will likely transfer the AR/MR development team and production resources to Luxcase ITC (a joint venture between Luxshare ICT and Pegatron), led by Luxshare ICT, in 1H23. It essentially means that Luxshare ICT will take over this product’s subsequent design and production. Such changes will lead to the subsequent acceleration of reducing the cost of the headset, which is what Apple expects.
  • Pegatron is a shareholder of Luxcase ITC, so its profit will be beneficial to Pegatron, but essentially, Pegatron is gradually withdrawing from Apple’s headset business.
  • As the shipments of Apple’s first-generation AR/MR headsets are extremely low, it is difficult for Luxshare ICT to profit from this investment in the short term. Luxshare ICT’s growth in 2023 and 2024 depends entirely on Apple’s orders. Therefore, if Apple expects Luxshare ICT to take over the headset, it will be difficult for Luxshare ICT to refuse this request.
  • Luxshare ICT will use Luxcase-ICT to win orders for Apple’s new AR/MR headset products in the future. I think the best scenario for Luxcase-ICT is for Apple’s headsets to sell well and conduct an IPO when the visibility of revenue and profit growth is good.
  • Apple’s second-generation AR/MR headset has two high-end and low-end models. The high-end and low-end will be developed and produced by Luxcase ITC and Foxconn, respectively. The current launch schedule for both models will likely be in 2025.


To top off his report, Kuo added a dose of skepticism towards Apple's XR device. Kuo stated:

"I think this could be a potential warning sign for Apple. Despite repeatedly stating that it is optimistic about AR, why can it not make suppliers willing to continue cooperating with Apple to develop this product? In the past two years, why have some Apple suppliers been more willing to invest in new businesses, such as electric vehicles, than cooperate with Apple’s expansion/investment?"

Perhaps those involved in developing the headset hardware don't have a clue what software and marketing approach that Apple is planning for the device. VR headsets from the likes of Meta aren't selling well as interest in the Metaverse is collapsing. So the general thinking is that Apple's headset is unlikely to be a big hit either. In general, underestimating Apple on this front could be a big mistake. Though only time will tell.   

10.X2 - Ming-Chi Kuo Supply Chain News


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