Earlier this week, the CEO of Magic Leap, Rony Abovitz, announced that they will be making extensive cuts to their workforce in order to adapt to the new challenges and economic difficulties that COVID-19 has brought. In a statement on the company’s website titled “Charting a New Course”, Rony says that the company has assessed their business and will be making “targeted changes” to their operation.
The biggest of these targeted changes is that they will lay off about half of their workforce. They will also be de-emphasizing their consumer business and putting more effort into enterprise services and products.
It looks like the company that specializes in augmented-reality products has stalled out in actual reality. Magic Leap was founded in 2011 as a startup and quickly amassed support from high-profile investors such as AT&T, Alphabet, Warner Bros, and even the Kingdom of Saudi Arabia’s sovereign investment funds, raising $2.6 billion of investments.
In 2018, they released the Magic Leap 1, the first and only product that the company has ever released. The AR glasses are a wearable computer, similar to a VR headset, that sells for over $2,000 on their website. At first glance, the transparent lenses of the Magic Leap 1 give it the appearance of strange, futuristic swim goggles. Though odd-looking, this high-tech software allows the user to combine reality with virtual reality by combining interactive digital imagery with the actual environment.
They may have flopped because it arrived too late to the augmented reality market and because the Magic Leap 1 simply cannot compete with some of the most technological AR glasses on the market.
The Kopin SOLOS was released in 2016 (shortly before the Magic Leap 1) and provided consumers with a product that worked just as well at a fraction of the cost — $499 instead of $2,295. Additionally, once Microsoft and Google jumped in the game with the Microsoft HoloLens and the Google Glass Enterprise Edition, consumers bought from them because of the guaranteed quality that Microsoft and Google consistently provide.
Rumors are swirling that Magic Leap will soon be purchased — the company recently met with Facebook and Johnson & Johnson to discuss a potential sale. However, their asking price of $10 billion dollars seems excessive for a company that has released just one product, which turned out to be a flop.
Ultimately, Magic Leap has become the latest company to succumb to the effects of the coronavirus. Their chances of revival look slim, as the company is merely a blip on the massive radar of augmented reality.