Magic Leap’s Pivot: From Consumer-Focused to Enterprise-Driven
In late 2020, Magic Leap announced a significant shift in its strategy under the leadership of incoming CEO Peggy Johnson. During this time, she stated that what she found was not that something was broken but rather that the company needed a bit more focus.
At first glance, her words may seem like typical understated chief executive speak, downplaying the challenges the company faced. However, it’s clear that things weren’t working as planned. Despite the impressive technology behind their mixed-reality headsets, Magic Leap struggled to find success in the consumer market.
The primary issue was the lack of a substantial and willing audience for a $2,300 mixed-reality headset. This challenge is not unique to Magic Leap; numerous other companies have faced similar difficulties in this space.
A Shift Towards Enterprise
Magic Leap took a cue from its peers and pivoted towards the enterprise market. By doing so, they joined the ranks of companies like Microsoft and Epson, which had already made significant strides in this area.
The change was evident at CES 2023, where demos showcased the capabilities of Magic Leap’s technology in various serious use cases. These demonstrations were not focused on gaming or entertainment but rather on the potential applications of augmented reality (AR) in medical settings, education, and other industries.
CTO Daniel Diez on the Pivot
CTO Daniel Diez explained that the shift towards enterprise began to take shape at the end of 2019. According to him, this timing was fortuitous as it coincided with the prolonged financial slowdown, making luxury technology even more inaccessible to consumers.
"We really saw that there was a value to be derived from AR much sooner from enterprise," Diez said. "The feedback we were getting from them was that… It also gave us insight into how the product needed to evolve to be truly purpose-built for enterprise, and that’s what you see in the Magic Leap 2."
A Focus on Enterprise
Magic Leap’s decision to prioritize the enterprise market appears to have paid off. With a $3.5 billion investment from various prominent companies like Google, Alibaba, and Qualcomm, they now have the necessary resources to focus on this sector.
"We see an immediate opportunity in enterprise," said CTO Julie Larson-Green. "I think on consumer, you kind of have to have some other consumer content business alongside that, really. So we’re not really focused on that side right now."
Recent Fundraising and Magic Leap’s Future
In recent weeks, Magic Leap has made headlines for its fundraising efforts rather than any specific product or hardware announcements. The company received a controlling stake from Saudi Arabia through its public investment firm.
The influx of funds has sparked questions about Magic Leap’s future roadmap. CTO Daniel Diez reassured that the new investment will have a direct impact on the company’s focus on enterprise and ensuring their devices can amplify the ability of professionals to accomplish complex tasks.
"We’re very lucky to have a very supportive investor base," Diez said. "They are very much in line with our vision of really focusing on enterprise and making sure the devices can amplify the ability of folks to do really complicated things. Our board and our financiers are all on the same page."
The Future of Magic Leap
As Magic Leap continues its journey, it will be interesting to see how their focus on enterprise plays out in the market. With the necessary resources and a clear direction, they have the potential to become a leader in this sector.
However, as with any pivot, there are risks involved. Can Magic Leap successfully transition from a consumer-focused company to an enterprise-driven one? Only time will tell.
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