No one expects Apple's upcoming mixed reality headset to be inexpensive. With an MSRP of $3,000, it is expected to be three times the price of Meta's Quest Pro (although a permanent $500 price cut is being considered).

However, if Apple wants to ensure some profit for each unit, there does not seem to be much choice. Many reports emanating from Asia tally an estimated bill of materials (BOM) for the upcoming headset, which totals between $1,300 and $1,600.

Still clearly about half the expected MSRP of the headset itself, but according to Bloomberg, Apple's R&D expenditures are substantial at over $1 billion per year.

Also, to sell at $3,000, margins are still thinner than the company's best-selling iPhone series, with recent estimates putting the production cost of the $1,099 iPhone 14 Pro Max at about $464 per unit.

This caveat aside, how did the various analyses arrive at their cost estimates? Simply put, the headset will be a very sophisticated product, and if it requires multiple micro OLED screens, cameras, chips, and other components, the price will skyrocket.

The most detailed report comes from Minsheng Electronics, which breaks down costs by component.

The report estimates that the most expensive component is the micro OLED display at $280 to $320, followed by the headset's 14 camera modules at $160. The assembly is estimated to cost $110 to $120.

These are three-digit costs, but a series of two-digit components (a frame for $95, a lens system for $70-80, and a 3D sensor for $80-90, to name three) brings the total cost of the raw components to about $1,400. Factoring in post-shipment shipping costs, the final bill to Apple would be "conservatively estimated to be within $1,600."

A second report from Wellsenn XR, captured by XR Daily News, contains a similar figure totaling $1,509. Here, the two screens are again the most expensive components, this time accounting for $350 apiece, for a total of $700.

The final report presents two analyses with lower estimates of $1,290 and $1,300. However, neither appears to take into account shipping costs, which could bring the total closer to the other estimates.

With the high cost of entry even just for the sake of it, it is not surprising that people inside and outside the company are skeptical that Apple's mixed reality efforts will really be the next big thing. Then again, the past decade has proven that betting against Apple is a bad move, and there are still reasons why the headset could run afoul of critics in the long run.