With a 54% tariff set to apply to Chinese-made goods and 46% for Vietnam, will the price of VR headsets in the US soon increase?
Enacted by President Trump via executive order yesterday, the new import tariffs are set to take effect from April 9, next Wednesday. They apply to goods manufactured in these countries, not just sold by companies from them. And while there are some exemptions, VR headsets aren't on that list.
Most headsets today, including Apple Vision Pro, Meta Quest, PlayStation VR2, and Pico, are made in either China, Vietnam, or both. While Trump had already placed a 20% tariff on Chinese imports in recent months, headset companies could plausibly absorb these added costs, and he hadn't yet applied a tariff to electronics made in Vietnam.
But with tariffs moving to 54% and 46% for China and Vietnam respectively, it seems very unlikely that most headset companies will be able to avoid increasing prices.
David Heaney
For example, analyst estimates placed the cost to Meta of each Quest 3 at around $430, excluding R&D and other indirect costs, and thus the new tariffs should bring this to around $650, significantly higher than its current $500 price.
Could we soon see a $700 Quest 3, $500 Quest 3S, and PlayStation VR2 move back to $550?
Even the US-assembled Bigscreen Beyond 2 would feel the heat from the tariffs. Most of its components, such as its expensive micro-OLED displays from China, would be affected. And this cost would almost certainly need to be passed on to the buyer.
Meta has been moving around half of Quest production to Vietnam, to avoid the tariffs Trump was expected to place on China. But with Vietnam hit too, this diversification won't make a major difference.
Not every company will necessarily need to increase prices, though. The same analyst estimates place the cost to Apple of each Vision Pro at around $1700, also excluding R&D and other indirect costs, and thus Apple could still be making an acceptable profit even if the cost soon rises to around $2500.
David Heaney
Consumer hardware companies typically build up large stock pools in each country they sell in, so we're not expecting to see Quest and PS VR2 prices suddenly jump next week. But eventually the US stock of these headsets will run out. And when new units are coming in at around 50% higher cost, how could the current US prices hold?
Of course, it's possible that President Trump scales back or cancels these tariffs entirely by then. Trump's administration has described tariffs as a mechanism of putting pressure on countries to make certain policy changes, and perhaps the US president decides his aims have been satisfied before US headset stockpiles run out. The rapidly shifting global political landscape makes definitive predictions here impossible, so we'll be keeping a close eye on the situation over the coming weeks and months.
