By Jack Nicas
Magic Leap Inc. is an oddity in the tech industry, even by
Silicon Valley's heady standards.
Located adjacent to a trailer park in South Florida, Magic Leap
has amassed nearly $1.4 billion in funding, more than 500 employees
and a dozen big-name investors.
Yet the secretive startup still lacks one major detail: a
product. After nearly four years, Magic Leap is still developing a
head-mounted gadget that projects images onto users' eyes so the
digital world appears to interact with real life.
On Tuesday, the startup confirmed another big step toward
bringing its so-called mixed-reality device to consumers,
announcing it raised $794 million in new funding from some top
firms in tech, finance and entertainment. Chinese Internet giant
Alibaba Group Holding Ltd. led the funding round, which Magic Leap
says values the Dania Beach, Fla., company at $4.5 billion.
Alphabet Inc.'s Google and Qualcomm Inc., which backed Magic
Leap's $542 million round in October 2014, reinvested. They were
joined by J.P. Morgan Chase & Co., Fidelity Management and
Research Co., Morgan Stanley, Wellington Management Co., funds
advised by T. Rowe Price Associates Inc. and Time Warner Inc. unit
Warner Bros.
Magic Leap has yet to publicly show the device it has been
working on for nearly four years, a head-mounted gadget that
projects images onto users' eyes so the digital world appears to
interact with real life. Magic Leap is one of a number of startups
preparing for a future beyond smartphones and laptops, where people
are immersed in digital worlds. The company is creating goggles
that can project 3-D images onto the viewer's retina so it appears
that, say, a furry monster is walking around in real life.
Presumably, in the future, viewers could have conversations with
family members across the country as if they were in the same
living room.
This blending of virtual and real worlds is called mixed, or
augmented, reality, different from the virtual-reality technology
developed by Facebook Inc.'s Oculus unit and others that place
people entirely into a digital space.
"Your brain is the video display; there's nothing in the way
anymore," said Magic Leap founder and Chief Executive Rony Abovitz,
a 45-year-old biomedical engineer who sold his last startup, a
robotic surgery firm, for $1.7 billion.
Virtual-reality headsets from Oculus, Sony Corp. and HTC Corp.
are hitting stores this year, in part because the technology is
easier to achieve than mixed reality, which must have sophisticated
sensors and software to constantly interpret the real-life
surroundings. That is why Magic Leap needs so much capital--the
company says it is virtually creating a new technology from
scratch.
Magic Leap said it has developed new computer chips that
leverage silicon photonics, a field of semiconductors that
essentially involves miniaturizing fiber-optic technology onto a
chip. These components can send data far faster than conventional
silicon chips. "We need to shrink components that have never been
shrunk to this size before," said Brian Wallace, Magic Leap's
marketing chief.
Even so, Mr. Abovitz claims Magic Leap's product isn't years
away. "We are actively in product development, manufacturing
operations and supply chain lines," he said, adding the company
will "be in the market relatively soon."
Magic Leap faces other challenges. Virtual-reality headsets
harness the energy and computing power of connected PCs, game
consoles or smartphones. Mr. Abovitz said Magic Leap's devices will
be "beautiful, light,...mobile and probably much smaller than most
people would expect."
Yet they will also likely need their own high-grade computer
processors and battery life to last a day.
Consumers generally use virtual reality in isolated settings,
such as at home. Magic Leap wants users to wear its devices in
public. The failure of Google Glass--an eyeglasses-like device that
placed a small screen above users' right eyes--suggests that
consumers are loath to wear computers on their face all day.
Google has revived its Glass project for business applications,
and Microsoft Corp. plans to distribute its $3,000 HoloLens
mixed-reality headset to developers this quarter. Neither company
has said it's developing a consumer device.
Mr. Abovitz declined to discuss price but said Magic Leap is
building a consumer product that will also have business potential.
Magic Leap's website shows an image of surgeons looking at a
three-dimensional heart.
Mr. Abovitz said the device could theoretically translate signs
and menus automatically when users travel abroad, or even give tips
as users study a game of chess. Alibaba Executive Vice Chairman Joe
Tsai is joining Magic Leap's board, which includes Mr. Abovitz,
Google CEO Sundar Pichai, and Richard Taylor, co-founder of Weta
Workshop, the New Zealand special-effects studio behind the "Lord
of the Rings" movies. Alibaba said that it invests "in
forward-thinking, innovative companies" that it "can both provide
support to and learn from." The company declined further
comment.
Alibaba was Magic Leap's "first-choice strategic partner to
enter China, " Mr. Abovitz said. Magic Leap is building "a whole
new computing platform, and they are the largest Internet player in
certain segments of China," he said. "I think those two things can
come together in a very complementary way."
Write to Jack Nicas at jack.nicas@wsj.com
(END) Dow Jones Newswires
February 02, 2016 00:15 ET (05:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
QUALCOMM (NASDAQ:QCOM)
Historical Stock Chart
From Mar 2024 to Apr 2024
QUALCOMM (NASDAQ:QCOM)
Historical Stock Chart
From Apr 2023 to Apr 2024