Report: Magic Leap Will Fail Due To Cost, Focus, & Design

Magic Leap may be doomed to failure in spite of improvements because of its cost and design decisions, according to a new report from Strategy Analytics. In fact, the market analysis firm predicts that AR devices are primarily driven by enterprise use cases rather than the general public and that will remain the case for a further three years at least. However, Magic Leap's issues start with the cost of its product being set at $2,295 and its focus on consumer applications and AR "experiences." Specifically, the pricing presents issues when compared to competing companies and startups such as DreamWorld offering headsets for as low as $399. Regardless of the benefits and features that Magic Leap has implemented, its cost simply isn't going to be palatable to the general consumer. In spite of that, the company has been building partnerships with the NBA, Weta, and Sigur Rós to promote its product. Strategy Analytics is also not at all impressed with Magic Leap's design decisions, calling the wearable both ugly and bulky.

The design and features of Magic Leap's most recent and upcoming offerings have been met with mixed reviews. On the other side of the equation, however, the firm doesn't believe the company can perform in the enterprise market at this point either. There, the firm's analysts note that Magic Leap would be met with stiff opposition from the already well-established Microsoft HoloLens, Google Glass, and Vuzix. Those competitors have accumulated invaluable experience in terms of meeting the AR needs of customers in that space. That's in addition to forming alliances with various sellers and solution providers in order to bundle hardware with software. By comparison, Magic Leap hasn't allocated any of its $2 billion in funding to research or development for the enterprise market, let alone partnerships. In short, the AR-centric company has spent entirely too many resources and too much time centered between enterprise and general consumers, according to the firm.

Whether or not Strategy Analytics evaluation of Magic Leap's situation holds true remains to be seen. However, it does seem as though the AR-centric company has spent a lot of resources and time holding its position just between the enterprise and the general consumer markets. That doesn't necessarily mean the company won't find an audience in those areas but it could mean that it ultimately has a harder time capturing meaningful market share in either.

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