Oh Dip, Magic Leap’s Got a New CEO

Photo: Michael Cohen/Stringer, Getty Images
Photo: Michael Cohen/Stringer, Getty Images

Magic Leap has had it rough during the pandemic. In March, word got out that the struggling augmented reality company was looking for a buyer. A month later, it reportedly laid off roughly half its workforce. Another month passed and it somehow pulled an additional $US350 ($502) million in funding out of nowhere. About a week after that, CEO Rony Abovitz stepped down. Now, the beleaguered startup has announced it’s found a new head honcho: Peggy Johnson.

Johnson, who currently serves as executive vice president of business development at Microsoft, will take up the mantle on August 1. Before that, she was an executive at chipmaker Qualcomm, and before that an engineer for General Electric’s military electronics division.

In an interview with the New York Times, Johnson described the move as something she chose to do, reaching out to Abovitz once news broke he was leaving. Johnson also noted that the pandemic highlighted expanded opportunities for AR as more people work remotely. Namely, for enterprise-first applications like job training, medicine, and industrial automation. “It really says something that, at this point in time, I would leave Microsoft to go to this space, because Microsoft is doing quite well,” Johnson told the NYT.

It is a bold move, considering that AR headsets have not done particularly well since the onset of the global pandemic. Or, ever. In the past month, Bose shut down its AR division, effectively killing its audio-only Bose Frames AR sunglasses. That was followed by news that North, a Canadian startup that’s spearheaded consumer AR glasses over the past two years, was snapped up by Google for an estimated $US180 ($258) million. As part of the deal, North’s forthcoming second-generation smart glasses were also killed off.

Magic Leap itself also flopped in the consumer space. After years of hype and $US2 ($3) billion in investment, the consensus was that its first headset was underwhelming. For many reasons, AR headsets haven’t quite taken off despite major advances in the technology itself. The companies that tend to stay afloat are the ones who have shifted gears toward the enterprise space — Microsoft’s HoloLens 2, Google’s Glass Enterprise 2, Epson’s Moverio, to name a few.

Magic Leap itself has also refocused its efforts toward enterprise, which does lend Johnson’s move the air of a calculated risk, rather than a straight-up Extremely Bad Idea. Still, AR and spatial computing is a nascent industry and it’s unclear if it’ll ever be tech consumers are willing to adopt.