Magic Leap Lays Off Entire Sales and Marketing Department
Magic Leap laid off about 75 positions on Thursday (July 18), including the entire sales and marketing department. Notably, even when Magic Leap announced cutting half its workforce in 2020, it didn't eliminate the entire sales and marketing department.
This marks a major transformation for the once high-profile tech company. A Magic Leap spokesperson confirmed the layoffs, stating the company has adjusted its strategy "to better adapt to new market changes and opportunities."
The elimination of the sales and marketing department is because Magic Leap has abandoned selling products to consumers and enterprise customers, instead becoming an optical display technology provider for other AR glasses manufacturers. Can Magic Leap succeed in this pivot from "gold mining to selling shovels" as a technology service provider behind AR manufacturers?
AR Pioneer Becomes a Casualty: Imbalance Between Marketing and Product
Magic Leap was founded in 2010 with the initial goal of creating a revolutionary AR headset that would seamlessly blend the virtual world with the real world through augmented reality technology.
However, Magic Leap is headquartered in Plantation, Florida, rather than the tech-dense San Francisco Bay Area. Founder Rony Abovitz, an expert in both computer science and neuroscience, stated that a major benefit of Magic Leap staying in Florida for R&D and production was:
The ability to keep secrets.
In contrast, if headquartered in Northern California, considering Silicon Valley's job-hopping culture and tech gossip spirit, it would be almost impossible for Magic Leap to keep secrets.
Rony Abovitz's emphasis on secrecy stemmed from his belief that Magic Leap's technology was disruptive and would soon achieve technological breakthroughs. In external interviews, Magic Leap consistently emphasized that its technological approach was completely different from Microsoft HoloLens and Meta AR/VR.
Then came the "whale in the gymnasium" video released in 2015. Although media later exposed that the whale was a CG effect (of course, the now-booming video large models like OpenAI's Sora also tend to use special effects to beautify product effects), Magic Leap still garnered worldwide attention and billions of dollars in funding, seen as a player that could rival Microsoft HoloLens and Facebook Oculus.
However, all of this took a turn in the second year after the release of their first product, Magic Leap One.
In the summer of 2018, the Magic Leap One, priced at $2,295, began official shipping, allowing the public to personally experience Magic Leap's proud "technology" for the first time. To be fair, the initial media reviews of Magic Leap One were not low, even slightly better than Microsoft HoloLens.
As one of the first invited media to experience it, The Verge reporter wrote:
Magic Leap is already the best AR headset I've experienced, and it's much better than looking at AR models through an Apple phone screen, but it's definitely not the major leap that Magic Leap has been touting for years; it's just somewhat better than existing products.
Not just in terms of optical display effects. In daily wear, although Magic Leap One reduced its weight to 316g, it was still not comfortable to wear, with a horizontal field of view of 40 degrees and a vertical field of view of 30 degrees.
In short, despite some technological innovation, its high price, limited application scenarios, and bulky appearance deterred consumers. Moreover, from concept videos to external promotions, Magic Leap set external expectations too high:
The result was massive damage to the brand and sales.
According to sources cited by The Information, Magic Leap One sold only 6,000 units six months after its launch. However, near-eye display technology expert Karl Guttag stated that ### the information he heard was that actual sales were less than 2,000 units, with the rest being given away for free.
Spatial Computing Couldn't Save Magic Leap, What About "Selling Shovels"?
Magic Leap decided to transform.
In October 2018, Magic Leap ran from Florida to the San Francisco Bay Area to hold its first developer conference. The core of the keynote speech was what many people today have learned from Apple:
Spatial computing.
What Magic Leap called "spatial computing" then was no different from what Cook mentioned at the Vision Pro launch in 2023 - the fusion of the digital world and the physical world, also a new form of computer interaction. The difference is that compared to other manufacturers' pragmatism, Magic Leap chose to paint a grand blueprint, trying to regain external expectations and confidence.
At that developer conference, Rony Abovitz proposed the concept of "Magicverse," a "system connecting the physical world and digital world" composed of all applications and content on Magic Leap's spatial computing platform. Simply put, it aimed to completely blur the boundaries between the digital world and the physical world, which is the topic all XR companies and AI companies are discussing today. From this perspective, Magic Leap's ideas were indeed avant-garde.
Consequently, Magic Leap announced a series of content and application plans for developers, including the LuminOS interaction system designed specifically for spatial computing, the Helio browser, the Avatar Chat virtual avatar chat software, and an extremely realistic virtual AI assistant, Mica.
The problem was that these ideas were too advanced. Take the AI assistant Mica mentioned by Magic Leap; it's only now, with large model technology, that we're beginning to see hope.
Just a year after this conference, Magic Leap finally admitted its failure in the consumer market and had to adjust its strategy, shifting from the consumer market to the enterprise market.
It hoped to find new breakthroughs through applications in professional fields such as healthcare and manufacturing. Applications in the medical field included remote surgical training and augmented reality-assisted diagnosis, while manufacturing applications included equipment maintenance and factory layout optimization, all potential application scenarios for AR technology.
Although this shift helped the company maintain some revenue, it was still not enough to cover expenses, and Magic Leap continued to face severe survival challenges.
Due to its inability to achieve business effectiveness and its tendency to "paint pies in the sky," Magic Leap has been called the "American LeEco." Interestingly, Magic Leap received a round of funding this year, with the investor being the famous "receiver" and "honest man" Saudi Public Investment Fund (PIF), amounting to $590 million. PIF has invested in Magic Leap multiple times, owning over 54.9% of its shares, becoming the controlling shareholder.
However, judging from the new round of layoffs, the Saudi tycoon's support has not reversed Magic Leap's fate, leading to the scene at the beginning of the article: it directly cut off its sales and marketing department this week, planning to try a new business model through technology licensing.
Magic Leap believes that their optical display technology still leads the industry.
But will companies really pay for this?
In May this year, Magic Leap announced a multi-faceted strategic technology partnership with Google, "This collaboration combines our extensive optical capabilities with Google's technology, accelerating the transformative power of AR and continuing to bring immersive experiences to the developer ecosystem and customers."
At the end of last year, Google abandoned its own AR glasses hardware project, hoping to drive the development of the AR glasses market by licensing its leading software and AI technology. In other words, Google no longer manufactures AR glasses but hopes to become the "software" behind AR glasses, like providing Android.
Considering Magic Leap's influence, it can basically be understood as Google "bringing a little brother," providing support for optical display technology when terminal manufacturers need it. However, in projects such as Google's collaboration with Samsung on MR headsets (video see-through), Magic Leap's optical display technology has no place.