Magic Leap – Creations great but not small

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Technology is there but size is miles off.

• While I do believe that Magic Leap is capable of producing an augmented reality experience (AR) that far outstrips anything its peers are offering, I think it is years away from fitting that technology into anything that a consumer will tolerate.
• The latest leak (see here) from Magic Leap shows a unit that is clearly a development board in a clear plastic box powered with an external battery pack and a fairly large head unit.
• This has been reported to be the latest prototype called PEQ (product equivalent) that the company will be presenting to its board and investors this week.
• This group are all looking for results from the $1.39bn raised so far.
• Magic Leap CEO, Rony Abovitz, has been quick to identify the device as a R&D test rig used for data collection that helps with the creation of surfaces and textures in AR.
• This follows a number of data points that RFM research has collected over the last month that include:
  • There appear to be problems with the core fibre optic technology that has led to the company having to redesign elements of its offering (see here) to make it smaller.
  • Suppliers have described conversations with Magic Leap engineers that strongly imply that some parts of the system are not even past the concept stage.
  • Silicon Valley chatter also highlights the possibility of infighting between the Silicon Valley operations and the mothership in Florida as well as some high-level departures and very short senior tenures.
• I think that the key to understanding what is happening at Magic Leap comes from Rony Abovitz himself who describes his prototypes (see here) as being in “agile build cycles”.
• To me this means that the hardware and software design and specification of the PEQ product, that Magic Leap intends to launch, are far from being locked down.
• Consequently, there is no point whatsoever is spending a fortune in trying to miniaturise the hardware as all that investment would be wasted if something has to be changed.
• I also suspect that Magic Leap has been forced by the pressure to start generating revenues into producing a compromised product.
• RFM research indicates that the older, far bulkier prototype uses all of the Magic Leap technology and produces a great user experience but remains far too bulky to wear.
• Consequently, it appears that to make it wearable, Magic Leap has been forced to make compromises in the user experience.
• These would include features like field of view, resolution and refresh rate.
• This would explain why the feedback generated by the few who have experienced the technology appears to have gone from “wow!” to “ho-hum”.
• Hence, I think that Magic Leap is very far away from producing the kind of product with which it could take the AR market by storm.
• I don’t think that this is a problem as almost all of its competitors are looking to sell their units to enterprises where the user experience is much less important (see here).
• Magic Leap is aiming for the consumer and given how poor the general AR experience is today, I can’t see anyone producing a successful consumer device for 2-3 years at least.
• This gives Magic Leap time in terms of the market it is aiming at but the real question is what time frame did it promise its investors and will they be willing to pour a lot more money into this company?
• One thing I am pretty sure of is that Magic Leap is going to need it.