Magic Leap’s sales numbers reportedly haven’t matched CEO Rony Abovitz’s high expectations — and a second-generation headset could be years away from release. The Information has published a sobering update on the much-hyped augmented reality company, which released its first product last year. According to former employees and people close to the company, Magic Leap had sold around 6,000 Magic Leap One headsets six months after release, compared to a goal of 100,000.
The company is apparently prototyping a Magic Leap Two headset with 5G connectivity, a wider field of view, and smaller and lighter hardware with multiple color options. But the project is reportedly hampered by “fundamental technology constraints,” and Magic Leap is more likely to release a near-term update with only slight changes.
Meanwhile, The Information reports that two high-profile board members left quietly in 2018: Google CEO Sundar Pichai and former Qualcomm executive chairman Paul Jacobs. Both cases involved extenuating circumstances, though. Jacobs had been abruptly removed from Qualcomm’s board after trying to organize a buyout, and Pichai’s schedule was reportedly too busy, which makes sense given his expanding role at Google’s parent company Alphabet. Pichai was also replaced by another Google executive, Jennifer Fitzpatrick, so the company itself hasn’t ditched Magic Leap.
But Magic Leap has also reportedly laid off dozens of employees in the past weeks. Last month, Business Insider reported that two executives, CFO Scott Henry and SVP of creative strategy John Gaeta, had left the company. Documents revealed that the company signed over nearly 2,000 patents as collateral to JPMorgan Chase earlier this year. This isn’t an inherently bad sign, and Magic Leap has said it’s in the middle of raising a significant new funding round. But the deal could cause problems if Magic Leap hits financial trouble down the road. A much smaller AR company, Meta, was effectively destroyed when a bank sold its assets out from under it.
Magic Leap told The Information that its report was “littered with inaccuracies and misleading statements.” But it’s difficult to gauge the company’s progress. The initial wave of hype around AR has worn off, so Magic Leap is simultaneously facing public disillusionment and potential competition from Facebook, Apple, and Microsoft — all of which are interested in AR glasses.