After hype and fallback, Magic Leap finds a less cool but useful niche in augmented reality
OAt the Roscoe, Illinois-based PBC Linear plant, new workers wear Magic Leap augmented reality headsets as part of their training. For the past three years, the private company, which manufactures bearings and actuators, has been using the headsets for instruction and, more recently, for preventive maintenance and sales.
“We just saw a really cool demo for really cool hardware and our owner wanted to invest,” says Beau Wileman, applied cobotics product manager at PBC Linear. “The technology seems made for the industrial environment.”
It’s a far cry from the early days of Magic Leap, one of the most hyped tech companies of the past decade. It shows both the real potential of its technology under CEO Peggy Johnson, who took the top spot two years ago, as well as the slow pace of adoption. Augmented reality associates digital content, such as virtual instructions or 3D images, with the real world, unlike virtual reality where the user is fully entangled in the digital universe.
Six years ago, Forbes put Magic Leap and its founder Rony Abovitz on the cover of the magazine for its technology’s promise to be “a disruptive machine”. The startup, which has raised more than $2 billion from major investors including Alphabet and Alibaba Group, was valued at $6.7 billion at its peak. The technology was cool, but its business model – targeting consumers who had no real reason to shell out big bucks for its AR
In September, Johnson, previously executive vice president of business development at Microsoft
“There’s a lot of hype, and we’re not on the hype at all in this Magic Leap 2.0 world,” Johnson said. Forbes.
Magic Leap introduced its second-generation augmented reality headset, known as Magic Leap 2, on September 30. Aimed at businesses, it is lighter and more powerful, with better imaging, than the previous version. The enterprise device, which is cloud-enabled and includes security features, costs $4,999. A base model of the new device is available for $3,299.
“Consumers draw all the attention to new technologies. Things tend to shift from technology to toy to tool.
The ongoing strategy shift puts Magic Leap face to face with Microsoft’s HoloLens, which introduced its device in 2015 and has struggled with the technology ever since, as detailed in a recent the wall street journal story. Meta, Apple
The competition is blurring the lines between augmented reality and virtual reality somewhat, with Meta’s new Quest Pro, introduced in late October for $1,500, enabling a new pass-through mode that lets a user see what’s going on. around him. Johnson argues that pass-through doesn’t provide enough precision for technical tasks like surgery, and that to date, HoloLens is the only directly competing AR device. “We are confident that our industry-leading scope is the right direction for the business,” she says. She declined to discuss the company’s earnings or disclose how many helmets the company has sold to date.
Total business shipments for 2022 hit 1.3 million (compared to almost nothing on the consumer side) and are expected to reach 26 million in 2027, according to technology watch firm ABI Research. Eric Abbruzzese, director of augmented reality and virtual reality research at ABI, estimates that there are “a few million” augmented reality headsets on the market today, with Microsoft’s HoloLens leading the way. Magic Leap sales number in the thousands, he says, “absolutely less than 40,000, probably less than 10,000.” Johnson declined to comment on those numbers.
“If Microsoft continues to struggle with HoloLens, there’s an opportunity to supplant them a bit,” says Abbruzzese. “The general consensus with Magic Leap is wait-and-see.… There will be a question mark, enough or not, over Magic Leap. They haven’t had time to erase that question mark yet.
“There’s a lot of hype, and we’re not on the hype at all in this Magic Leap 2.0 world.”
Before becoming CEO, Johnson, 61, who grew up in Alhambra, Calif., just east of Los Angeles, had spent his career in Big Tech. She worked for 25 years at Qualcomm
Before becoming CEO of Magic Leap, she had visited its facilities and seen its technology, she says. “I knew it worked,” she says. “It wasn’t broken at all. I thought the consumer focus was wrong.
At Magic Leap, she thinks augmented reality devices will eventually experience a similar evolution to mobile phones, where companies that have both the reason and the money to pay more will be early adopters, and that’s not the case. is that later the cost will come down enough to make the devices viable for consumers. “The first cell phones were big, heavy and expensive,” she says. “Companies bought them because they had a reason to, and over time they got smaller and fell into the hands of consumers. That seemed like the pivot that needed to take place.
Mike Bechtel, chief futurist at Deloitte Consulting, agrees. “Consumers tend to focus all of their attention on new technologies,” he says. “Things tend to shift from technology to toy to tool.”
“There’s going to be a question mark, fair or not, over Magic Leap.”
But such changes can be slow and difficult. Natan Linder, co-founder of manufacturing software company Tulip (and 3D printing company Formlabs), says his company supports HoloLens and Realware, but thinks the technology isn’t there yet. “Generally, I’m skeptical,” he says. “There are tips and use cases from remote experts, but I don’t think you need a headset for 80/20 of what AR promises compared to holding a nice smartphone that can make a video call out of the box quite easily.”
For now, Magic Leap is focused on the enterprise, and in particular on areas such as industry, healthcare, and defense. At PBC Linear, Johnson says, the company cut training time from three weeks to just three days with the devices. Lowe’s, meanwhile, is using the devices to help with store layouts and restock shelves in cooperation with Nvidia. In healthcare, surgeons at UC Davis Children’s Hospital in Sacramento, Calif., used Magic Leap devices to help prepare for the separation of twin babies who were joined at the head. Working with Senti AR, Magic Leap’s devices can also help surgeons perform heart surgery more efficiently by placing a 3D image of the patient’s heart in front of them during surgery to improve navigation. Although Magic Leap devices are approved for use in surgery, this application is not yet commercially available.
“You hear people say augmented reality is a long way off,” Johnson says. “There are use cases right now with the technology in its current state. It’s not about building avatars and escaping the physical world, it’s about immersing yourself in the physical world. I think sometimes that gets lost because it’s not as flashy.