Apple has been forced to make major cuts to production forecasts for its Vision Pro augmented-reality headset due to design complexity, the Financial Times reported on Monday citing people with direct knowledge of the process.

The Vision Pro, launched last month and expected to be available early next year in the United States, has a starting price tag of $3,499 - over three times the cost of the priciest headset in Meta's line of mixed and virtual reality devices.

Chinese contract manufacturer Luxshare, Apple's only assembler of the device, was preparing to make fewer than 400,000 units of Vision Pro in 2024, the newspaper said, citing two people close to Apple and Luxshare.

Apple had an earlier internal sales target of 1 million units of the headset in the first 12 months, as per the FT report. Apple and Luxshare did not respond to a Reuters request for comment.

The iPhone maker has asked two China-based suppliers for enough components for 130,000 to 150,000 units in the first year, FT said, adding that plans for a more affordable version of the device have been pushed back.

A major difficulty in the production process is the manufacturing of the micro-OLED displays for the device, FT reported. Apple was unhappy with the yield of micro-OLEDs that are free of defects, the report said.

Apple and Luxshare did not immediately respond to an email asking for specifics of the challenges.

The cut to the 2024 production forecast has also "disappointed" Luxshare, a person close to the company told FT, as it was set to increase its capacity to be able to build almost 18 million units annually in the coming years.

(Reporting by Gokul Pisharody in Bengaluru; Editing by Nivedita Bhattacharjee)