Magic Leap and Other AR Startups Have a Rough 2019 Ahead of Them
The augmented reality industry faces significant headwinds in 2019 as major players like Magic Leap struggle to deliver on promises and consumer interest in mobile AR remains limited.
The augmented reality industry faces significant headwinds in 2019 as near-term momentum stalls for major players despite positive long-term prospects. Magic Leap exemplifies these challenges, as the company releases a developer kit that largely iterates on competitor offerings rather than delivering the revolutionary advances it promises. The startup loses a $480 million military contract bid to Microsoft and appears to reshuffle its strategy as Microsoft prepares a second-generation HoloLens focused on enterprise customers.
Consumer appetite for phone-based AR content remains lacking as the technology struggles to move beyond experimentation. Apple's ARKit fails to generate sustained user engagement on iOS devices, and few Android manufacturers continue to highlight Google's ARCore compatibility. The most successful mobile AR applications remain limited to lightweight features like selfie masks rather than the immersive experiences AR startups envision.
AR startups face difficult fundraising prospects in 2019 due to Magic Leap's struggles to justify its massive valuation and sluggish consumer adoption. Investors show increased skepticism toward pitch decks that project near-term spikes in phone-based or glasses-based AR users. The combination of slow hardware progress and limited consumer interest makes the coming year a challenging environment for emerging AR companies seeking capital.