Magic Leap has been one of the most funded and most hyped Silicon Valley startups but the billions of dollars investments haven’t translated into tangible market performance s far. A new report by The Information claims that the mixed reality startup has sold only 6,000 units of its $2,300 Magic Leap One Creator Edition mixed reality headsets in the first six months that the headset was available.
By all measures, this represents dismal performance and far below Magic Leap’s soaring targets. The company’s CEO Rony Abovitz reportedly told investors that the company aimed to sell “at least” a million units of the Magic Leap One headsets during its first year of availability. He later revised this initial sales target to 100,000, describing the new target as a realistic goal. The sales have however been so dismal that Magic Leap was recently dishing out free headsets to its employees.
The poor sales performance has also put a strain on the company which recently laid off a number of employees in various departments. Magic Leap has also put in place various cost-saving measures like slowing the pace of staff hiring and freezing work travel for some its departments. Through much of 2018, Magic Leap burned spent in the region of $40 million to $50 million per month so the company is still a long way from realizing sustainability in its operations.
Some key executives have also vacated Magic Leap’s board of directors but it is not yet apparent whether the recent shakeups have anything to do with the company’s poor fiscal performance. Newly appointed Alphabet CEO Sundar Pichai recently left Magic Leap board due to the high demands of his schedule although Google still retains a voice on Magic Leap’s board. Pichai’s slot at the mixed reality company’s board was taken by the Google Maps VP Jennifer Fitzpatrick.
Reached for comment, a Magic Leap spokesperson stated that the report was “littered with inaccuracies and misleading statements” and that it erroneously portrayed the company’s operations.
The report by The Information on Magic Leap’s sales performance quotes a single source. The number is also difficult to verify because Magic Leap does not discuss its sales figures with the rank-and-file employees. It is therefore hard to verify the accuracy of The Information report. A similar report emerged just other a month ago stating that Magic Leap had probably sold only a few thousand of its AR headsets. Although the Magic Leap figures are unusually dismal, the whole industry has been grappling with slow and low uptake for virtual reality. Both the small and large players appear to be struggling. The past month or so saw Google discontinue its Daydream View headset while the startup Jaunt recently sold all its technology to Verizon. It is therefore not out of the ordinary that Magic Leap is also experiencing similar pressure in pushing the uptake of its hardware to the market.
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