Magic Leap Searches For Alternate Reality to Counter its Lagging Sales

Published on December 11, 2019

Founded by Rony Abovitz in 2010, Magic Leap is an often secretive augmented reality (AR) headset manufacturer. Touting a head-mounted virtual retinal display which overlays 3D computer-generated imagery on top of real-world objects by “projecting a digital light field into the user’s eye,” it promised to change the world of computing interfaces.

It raised approximately $2.6 billion from multiple investors including Google, Alibaba Group, and AT&T, and in December 2016, Forbes estimated that Magic Leap was worth $4.5 billion.

Despite many beliefs that the company’s offering would out-compete Microsoft’s HoloLens, it’s launch told a very different story. Lacking the platform ecosystem which Microsoft could leverage, it is rumored that Magic Leap’s woefully under-performing launch in the consumer market sold only 6,000 units. Compare that with Microsoft’s roughly 50,000 units sold.

As a result, Magic Leap has announced that it is renaming its augmented reality headsets from the “Creator Edition” to the “Magic Leap 1” in an attempt to shift focus toward (and to attract) business customers.

Up against the Hololens, they’re facing an uphill battle. It has also announced the launch of Magic Leap 1 Enterprise Suite as a “huge step forward” for the company.

To be clear, I’m still bullish on AR applications and the long tail will see various form factors dominating the AR/VR/XR segment.

However, in the near term, expensive specialized headsets like the Magic Leap 1/Creator Edition provide little utility for non-business applications and will continue to struggle without established platforms propping them up.

Non-phone based AR form factors must focus on the B2B market to succeed, and even then, they’re facing an uphill battle. Even Daqri didn’t make it.

Adam Zuckerman is a Columnist at Grit Daily. He is the founder of Fosterly, an Eisenhower Fellow, an advisor to numerous startups, an angel investor, and former intrapranuer and VC at Discovery. He now consults for organizations, universities, and governments -- often with a sustainability and future facing technology impact focus -- around the world.

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