Augmented Reality Startups Face Tough Road in 2019 Despite High Hopes
Augmented reality faces a challenging 2019 as major players like Magic Leap struggle to meet inflated expectations. Early-stage startups are likely to find it increasingly difficult to secure funding as the industry's timeline for mainstream adoption proves overly optimistic.
Augmented reality faces a challenging 2019 as the industry's heavy hitters struggle to live up to years of inflated expectations. While the foundational technology continues to build out, momentum is clearly slowing down for early-stage AR startups that pitch near-term spikes in consumer users. Investors are losing patience with optimistic timelines, making it increasingly difficult for new hardware companies to secure funding in a space dominated by a few well-backed giants.
Magic Leap serves as the prime example of these industry-wide struggles. After years of aggressive hype and billions in funding, the company releases a product that largely iterates on existing competitor headsets rather than revolutionizing the market. Some industry insiders believe Magic Leap actually hinders overall AR progress by scaring away other hardware startups and siphoning critical investor attention.
As a result of these market realities, Magic Leap is shifting its focus away from birthing a consumer market and toward chasing big enterprise customers. This pivot becomes even more urgent following a major military contract loss to Microsoft, who is aggressively advancing its own HoloLens platform for enterprise users. Meanwhile, consumer appetite for phone-based AR content remains notably weak, leaving little room for error among early-stage AR companies.