Sales numbers at Magic Leap are reported to be extremely disappointing, and certainly way below the expectations of CEO, Rony Abovitz. It is also reported that a second-generation headset is unlikely to be released for years. The Information published a downbeat report on this much-hyped augmented reality company, after the release of its first product in 2018. According to some former employees and others close to the company, sales have only reached around 6,000 Magic Leap One headsets, compared to the target of 100,000.
Magic Leap has been apparently prototyping a smaller and lighter Mark Two headset, which comes with 5G connectivity and a wider field of view, along with multiple color options. Insiders state that the project is beset by “fundamental technology issues,” and that a near-term updated version is likely with only a few changes.
Sundar Pichai gave up his board position to another Google executive
Meanwhile, The Information also mentioned that two high-profile board members, Google CEO Sundar Pichai and former Qualcomm executive chairman Paul Jacobs, had left the board during 2018. Apparently, there were mitigating circumstances though, as Jacobs was summarily dismissed from Qualcomm’s board after an attempted buyout, and Pichai reportedly became too busy as his role at Google’s parent company Alphabet grew enormously. Pichai was replaced by another Google executive, Jennifer Fitzpatrick, so it looks like Google has not walked away from Magic Leap.
More worryingly, Magic Leap has reportedly laid off numerous employees over the past weeks. Last month, it was reported in Business Insider that CFO Scott Henry and SVP of creative strategy John Gaeta, had both left Magic Leap. Additionally, papers show that the company had signed over nearly 2,000 patents to JPMorgan Chase, as loan collateral, earlier in 2019, and although this is not necessarily a negative sign, as the company has said it is currently started a significant new funding round, the deal could create issues if there are any financial problems for Magic Leap later in its life. History shows that Meta, a much smaller AR company, was effectively put out of business when its assets were sold by a lender bank.
Magic Leap told The Information that the story was “littered with inaccuracies and misleading statements.” However, it is very hard to see a way forward for the company. The initial enthusiasm for AR has faded away and thus Magic Leap has to contend with both public disillusionment and the looming competition from Facebook, Apple, and Microsoft, all of which are likely to launch AR glasses in the near future.
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