Magic Leap Pushes into Business AR, Despite Layoff Reports

Augmented-reality (AR) startup Magic Leap is “pivoting” its AR headset toward businesses. Is that a move designed to open up new markets, or is it a Hail Mary pass after consumer-centric developers failed to flock to the device?

(For those unaware of augmented reality, it’s the use of a headset or smartphone to project digital images onto the user/viewer’s real-life landscape; that’s in contrast to virtual reality (VR), which immerses the user/viewer completely in a virtual world.)

To be fair, Magic Leap’s original headset, dubbed “Magic Leap One Creator Edition,” was extremely pricey at $2,295, which limited its appeal as something that developers could casually pick up and play with. The price of the new, tweaked headset, the “Magic Leap 1,” remains unchanged, although the “enterprise suite” (which includes the hardware and enterprise support) is $2,995.

As part of the business-y push, Magic Leap will also roll out a software platform targeted at enterprise developers and users, “Jump by Magic Leap,” which it bills as a “collaboration and co-presence” platform. In theory, that means co-workers will be able to be “digitally co-present,” which must mean their AR avatar virtually joining a meeting or event. The company is also emphasizing Learn and Assist, an AR module for training people remotely, and Location-based Experiences, which allows companies to set up AR-based “pop-up experiences” (for example, allowing customers wearing the headset to virtually experience a vacation or hotel).

Magic Leap is locked in competition with Microsoft’s HoloLens 2, a slimmer version of the original HoloLens, which has many of the same capabilities as Magic Leap and is marketed toward the same audience. The HoloLens 2 costs $3,500 per device, and features its own host of apps and services (as well as hooks into Azure, Microsoft’s cloud platform). 

Magic Leap has raised more than $2 billion, which is an astronomical amount for a startup, but Microsoft is capable of throwing nearly infinite resources at something it thinks will define the future. While that’s not a guarantee of success for the HoloLens—Microsoft also threw enormous amounts of money at Windows Phone, only to see its smartphone aspirations crushed beneath the boot-heels of iOS and Android—it does raise the stakes for Magic Leap. And that’s before you consider the longstanding rumors that Apple will push out an AR headset of its own sometime within the next two years or so.

AR is a nascent industry, but it’s already super-vicious. Welcome to tech.

Magic Leap Layoffs

If things weren’t tense enough for Magic Leap, the startup has reportedly endured significant layoffs and poor sales. According to The Information, Magic Leap only sold 6,000 headsets in the six months since the device’s release, far below CEO Rony Abovitz’s goal of 100,000 units sold during that period. There have also been dozens of layoffs, allegedly, and two key executives have departed

But that doesn’t mean Magic Leap’s doom is imminent. If it holds on long enough for AR to truly go mainstream, and designs a headset with broad market appeal, it could succeed. The big question is when the “mainstreaming” of AR will actually take place; although many analysts and experts breezily predict that AR will enhance everything from advertising to business presentations in the years ahead, it’s still unclear when and how that will actually happen.