Businessmodel of Magic Leap

Customer Segments

Magic Leap remains a young start-up. Its flagship augmented reality product remains in development and is not set to be released for some time. As such, its target market remain unclear. Once it is ready, however, the Company’s product will be made available to the general consumer market, most likely initially targeting early adopters of technology, tech enthusiasts, and higher income earners that can afford the price of the product.

Magic Leap’s technology has also been reported to have uses beyond the consumer market, and could be developed or integrated into products that specifically target certain industries, notably education and healthcare. The Company’s product has already demonstrated uses for companies operating within the gaming industry. It appears that magic leap will launch in the US, but will ultimately move into other international markets.

Value Propositions

Magic Leap provides value to its customers in the following ways:

• Its proprietary technologies, with the Company’s product underpinned by proprietary, state-f-the-art technology that cannot be found in other competing devices, including those from leading companies such a Google and Microsoft;
• Its high-profile backers and investors, with the Company attracting investment from a range of leading technology and entertainment companies, including Google, Warner Brothers, Alibaba, and Qualcomm Ventures;
• Its expert team, with the Company led by a team of expert developers, technologists, and experienced industry executives; and
• Its innovative augmented reality, with the Company touting numerous uses for its mixed augmented and virtual reality technology, including across the consumer, education, healthcare, creative, entertainment, and gaming industries, providing new and interesting ways for people to interact with content. ### Channels

Magic Leap operates a website at www.magicleap.com, through which it provides information on its product, its uses, and its development team. The Company does not currently operate an online sales channel as it does not yet have a product to sell.

Magic Leap is expected to sell its product directly, as well as ultimately via various third-party retailers, both online and physical. The Company currently develops the product and its software, handles enquiries and press through its network of offices in the US – including in Austin, San Francisco, Seattle, and Boulder – as well as through locations in New Zealand, the UK, and Israel.

Before sales begin to be made, the Company’s main channel between it and the public is its Marketing Department, which is responsible for the Company’s public communications and disseminating information on its product to relevant parties.

Customer Relationships

Magic Leap does not appear currently to offer and products or services. The Company’s Company is likely to operate a largely self-service system, with pre-orders and sales initially available online through the Company’s own website, requiring little interaction with members of the Company’s sales staff.

Magic Leap provides a range of information resources through its website, notably press releases that keep potential customers up-to-date with company and product developments, as well as its blog, which provides a more personal insight into the Company’s development and management team, and the Company’s inner workings.

Potential customers are able to contact the Magic Leap team directly with enquiries via email. The Company also operates a number of social media accounts – including with Facebook, Twitter, Google+, and LinkedIn – through which it is able to interact directly with prospective customers, and provide timely updates as to its operations.

Key Activities

Magic Leap is a technology and computing company, engaged in the development of an augmented and virtual reality device and platform, which seeks to combine the experience of digital and physical worlds.

The Company is currently developing its Mixed Reality computing platform that enables users to interact with the world, as well as its Dynamic Digitised Lightfield Signal, which enables users to generate images from real objects and then place those images into the real world. Magic Leap has attracted significant investment form the tech space, including an investment from Google and a strategic partnership with China’s Alibaba.

The Company was founded in 2011 and is based in Dania Beach, Florida. It has additional locations in Santa Cruz, Los Angeles, and Mountain View, California; Seattle, Washington; Austin, Texas; and New Zealand, the United Kingdom, and Israel.

Key Partners

With its flagship product still in development, Magic Leap works in conjunction with a number of partner organisations to ensure that its product is completed to the best possible quality. These partners include:

• Financial and Investment Partners, comprising various private equity firms, specialist tech investors, technology companies, and entertainment studios, that provide financing for the Company, which will remain key until it begins generating revenue for itself;
• Technology and Development Partners, comprising various software developers, technology companies, and integration partners, with which the Company collaborates on developing innovative uses and applications for the Company’s technology; and
• Strategic and Alliance Partners, comprising various companies with which the Company’s shares tools and resources and collaborates on joint projects. Magic Leap has opened an augmented reality lab in partnership with Disney’s Lucasfilm unit to develop content for its product. The Company has also launched a partnership with messaging app Twilio to develop an augmented reality version of its product, and has been added to the National Science Foundation-funded Nanosystems Engineering Research Centre’s Industrial Partnership Program.

Key Resources

Magic Leap’s key resources are its proprietary technologies and intellectual properties, its IT and communications infrastructure, its research and development facilities, its partnerships – notably its technology and development partners, and its personnel- in particular its technical staff. Magic Leap owns and leases a number of properties that are key to its operations, including offices across the US, Israel, the UK, and New Zealand, as well as several development laboratories.

Magic leap’s proprietary technology is what sets it apart from its competitors. Searches of records published by the US Patent and Trademark Office identified a number of patent applications filed in Magic Leap’s name, including applications entitled ‘Using historical attributes of a user for virtual or augmented reality rendering’, ‘Methods and systems for implementing a high resolution color micro-display’, and ‘Three dimensional virtual and augmented reality display system’.

Cost Structure

Magic Leap incurs costs in relation to its research and development activities, the maintenance of its IT and communications infrastructure, the management of it partnerships, the implementation of marketing campaigns, and the retention of its personnel.

Revenue Streams

Magic Leap does not currently generate revenue and depends on the contributions of investors and financial backers to develop its product. Once its product is available for purchase, the Company’s principal stream of revenue will likely be sales of its physical devices.

The Company could also derive some revenue from the sale of and API, as well as the potential for advertising across its platform. These revenue streams, however, have not been confirmed.