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$2.6 billion later, Magic Leap looks in trouble

Magic Leap One
(Image credit: Magic Leap)

At some point AR glasses may go mainstream, but Magic Leap could turn out to be the quintessential example of being ahead of its time.

The much buzzed-about startup, which has raised $2.6 billion to date, looks to have fallen on hard times as sales of its Magic Leap One headset have not even come close to the company's lofty expectations.

According to a report in the The Information, the Florida-based Magic Leap has sold only 6,000 headsets in its since launch, compared to 100,000 units projected. And that projection was reportedly 1 million initially.

In addition, Magic Leap has apparently laid off “dozens of people across different departments,” including those in recruiting and engineering. The company has also lost Google CEO Sundar Pichai from its board, as well as former Qualcomm executive chairman Paul Jacobs. (Jennifer Fitzpatrick, a Google VIP in spearheads Google Maps, has taken Pichai’s place.)

In addition to its high price, the $2,300 Magic Leap One early reviewers have criticized the headset for its limited field of view, lack of killer apps and a cumbersome design.

For its part, Magic Leap did not respond to any specific aspects to The Information's story, but it did provide a statement: “The Information’s reporting is littered with inaccuracies and misleading statements, and erroneously portrays Magic Leap’s operations, internal plans and overall strategy.”

There is good news, however. Magic Leap is reportedly prototyping the Magic Leap 2 that features “5G compatibility, higher quality graphics, a wider field of view, greater depth perception and a smaller and lighter headset that comes in multiple colors”.

The bad news it that this headset is said to be years away from launch. In the meantime, Magic Leap may release a shorter-term update to its first headset with minor improvements.

Given that Apple is reportedly launching its own AR headset in 2022 and Apple AR glasses in 2023, Magic Leap will have to make serious improvements to its platform in order to stay in a game that will soon become a lot more competitive. 

Magic Leap will also have to contend with the much-improved Hololens 2 from Microsoft on the enterprise front, as well as an expected wave of consumer AR headsets and glasses that will leverage Qualcomm’s XR2 platform. Pokemon Go creator Ninantic has already announced that it is working on AR Glasses in partnership with Qualcomm.

Magic Leap will have a presence at CES 2020, so we may hear some announcements at that show.