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Magic Leap CEO Peggy Johnson: A new headset is just months away

It's called Magic Leap 2, and it's one of the reasons she didn't mind losing a $22 billion government contract to Microsoft.

Magic Leap CEO Peggy Johnson

Magic Leap CEO Peggy Johnson said the company will make its new headset widely available in Q1 of 2022.

Photo: Patrick T. Fallon/Getty Images

Magic Leap is getting ready to release the next version of its augmented reality headset through an early adopter program during the fourth quarter of this year, Magic Leap CEO Peggy Johnson told Protocol this week. The device, which will be optimized for the enterprise, is slated to become generally available in the first quarter of 2022, Johnson said.

Johnson took over the leadership of Magic Leap last summer following significant layoffs and a pivot to enterprise AR. She also joined in the midst of the pandemic, had to do all of her job interviews via video chat and has yet to meet any of her board members in person. "I'm not going to lie: It was a little awkward," Johnson said.

Before joining Magic Leap, Johnson worked for six years as a bizdev executive for Microsoft, and before that for more than two decades at Qualcomm. In her conversation with Protocol, Johnson shared how her work at Qualcomm in particular informed her insights into the potential of AR in the enterprise, Magic Leap's plans for its new headset and the upsides of losing a $22 billion deal to Microsoft.

The interview has been edited for brevity.

Magic Leap had some significant layoffs last year, shut down its entire consumer business, and its headset sales were reportedly far below internal projections. How has it been to step into the CEO role at a moment like that?

The company has been through some challenging times, but they had made the pivot to enterprise. I thought that was the right move. I grew up in the wireless industry, [and] was at Qualcomm for almost 25 years. And really, the mobile phone industry started in enterprise as well. The phones back then were slightly larger, maybe a two-hand sort of thing, and more expensive. But there were viable use cases for the enterprise with those mobile phones.

It's very similar to the state of AR right now. The devices are still getting there. They're not quite right for consumers, but they're perfect for the enterprise. So that move to enterprise, to me, made a whole lot of sense. And [Magic Leap] had great assets. I had a chance to visit the factory around 2018, so I knew the tech was good. I liked the pivot to enterprise and thought, from the outside looking in, they just needed focus.

Was a lack of focus the biggest mistake the company made?

They were looking at the time at consumer and enterprise. They were looking at building some of their own content. That's a major undertaking. For me, I'd rather rely on the content that's in the industry and help port it to the platform. With enterprise, you really need to fit into the workflows of companies. You need to understand how to fit into their workflow, not to introduce a new technology and assume that they can adapt it. That has been a major focus since I took over. A very strong focus on not just our enterprise customers, but their needs and the ecosystems around them.

When you launch a new technology, there is a need to have a strong ecosystem around it. I saw that going back to my Qualcomm days. I saw that at Microsoft. You want to make sure that you have a strong dev community, you have a strong [independent software vendor] community. So that's what we're working to reset, all focused on the enterprise for the launch of Magic Leap 2.

A few months ago, you said that Magic Leap 2 would be available in limited capacity before the end of the year. Are you still on track to meet that goal?

Yeah, we will release the product through an early adopter program, and we're really excited about it specifically for enterprise. For frontline workers, the product has to be something comfortable that they can wear all day long. So we've made the product half the size, about 20% lighter. But most importantly, we've doubled the field of view. That's a hard thing to do. The optics around that are complex, but we have a very talented engineering team. So we're excited to bring the product out at the end of this year, and then we'll be generally available in the first quarter of 2022.

How big is the market opportunity for enterprise AR?

IDC has a good report on the enterprise and consumer AR and VR markets, [predicting that altogether] by 2024 it will be a $140 billion market. But the [segment] that's growing the fastest is enterprise AR. By 2024, it's set to be a $36 billion market. And COVID has really accelerated things.

Speaking of big numbers: Microsoft recently signed a massive deal with the Department of Defense for AR headsets based on its HoloLens product. Magic Leap competed for that contract as well. Are you envious of Microsoft?

Well, sure, but I think it proves that the opportunity is massive. There's no better proof point than a $22 billion deal. So I applaud Microsoft for that. That's wonderful. But IVAS, the opportunity that Microsoft has won with HoloLens, is a concept. It's not a single product. The idea is to incorporate augmented reality across the military, both civil and frontline military personnel.

I think our next-generation product hits all the right feature sets that are needed for soldiers to wear the device for longer periods of time. It needs to be comfortable indoors, outdoors and [in] all types of environments. The team learned quite a bit from the engagement, and have been hard at work tuning the device to those sorts of needs.

It's interesting that you compare enterprise AR to the early days of the mobile phone, because there has also been a sort of reverse trend playing out in recent years: People bring their iPhones to work, and enterprise companies have to figure out how to make their apps work on consumer hardware. Is that something Magic Leap will have to anticipate as well, especially when it comes to phones running AR?

Absolutely. In fact, one of the areas that we started to look at is this whole idea of 3D meetings. After a year of Zooming and Teamsing and Webexing, people are pretty exhausted with daily 2D meetings. So there is a lot of focus on eventually having a 3D meeting experience. That will have to be a platform that can incorporate other devices, [and allow people] who have AR headsets [to communicate] with someone who only has a laptop or just a mobile phone.

Any enterprise areas you're especially focused on these days?

We're super excited about health care. There's been quite an uptake on what can be done with augmented reality. We had an interesting opportunity to work with the folks at UC Davis. They were working with some parents that had a set of twins who were conjoined at the brain. They were able to train their 30-person surgical team with Magic Leap devices and with one of our ISV partners, Brain Lab, who takes CAT scans and MRI, and they turn them into 3D images.

So you can imagine the 30-person team, from wherever they were, could all log on, and the conjoined brain was in the middle of their room. Everybody saw the brain in the same way, and they were able to to map the surgical pathways that they would take during the operation.

To take it a step further, we are looking at the needs of the surgeon inside of the operating room, so that there could be an overlay of digital content on the actual patient. If you're in the midst of an operation, and there's something you haven't seen before, you can call in someone who's done hundreds of those operations during the operation. Augmented reality may transform health care more than any other industry, at least in the near term.

Update: This story was updated to clarify the role HoloLens is playing for the Department of Defense.

Protocol | Workplace

In Silicon Valley, it’s February 2020 all over again

"We'll reopen when it's right, but right now the world is changing too much."

Tech companies are handling the delta variant in differing ways.

Photo: alvarez/Getty Images

It's still 2021, right? Because frankly, it's starting to feel like March 2020 all over again.

Google, Apple, Uber and Lyft have now all told employees they won't have to come back to the office before October as COVID-19 case counts continue to tick back up. Facebook, Google and Uber are now requiring workers to get vaccinated before coming to the office, and Twitter — also requiring vaccines — went so far as to shut down its reopened offices on Wednesday, and put future office reopenings on hold.

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Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

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Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.
Protocol | China

Livestreaming ecommerce next battleground for China’s nationalists

Vendors for Nike and even Chinese brands were harassed for not donating enough to Henan.

Nationalists were trolling in the comment sections of livestream sessions selling products by Li-Ning, Adidas and other brands.

Collage: Weibo, Bilibili

The No. 1 rule of sales: Don't praise your competitor's product. Rule No. 2: When you are put to a loyalty test by nationalist trolls, forget the first rule.

While China continues to respond to the catastrophic flooding that has killed 99 and displaced 1.4 million people in the central province of Henan, a large group of trolls was busy doing something else: harassing ordinary sportswear sellers on China's livestream ecommerce platforms. Why? Because they determined that the brands being sold had donated too little, or too late, to the people impacted by floods.

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Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
Power

The video game industry is bracing for its Netflix and Spotify moment

Subscription gaming promises to upend gaming. The jury's out on whether that's a good thing.

It's not clear what might fall through the cracks if most of the biggest game studios transition away from selling individual games and instead embrace a mix of free-to-play and subscription bundling.

Image: Christopher T. Fong/Protocol

Subscription services are coming for the game industry, and the shift could shake up the largest and most lucrative entertainment sector in the world. These services started as small, closed offerings typically available on only a handful of hardware platforms. Now, they're expanding to mobile phones and smart TVs, and promising to radically change the economics of how games are funded, developed and distributed.

Of the biggest companies in gaming today, Amazon, Apple, Electronic Arts, Google, Microsoft, Nintendo, Nvidia, Sony and Ubisoft all operate some form of game subscription. Far and away the most ambitious of them is Microsoft's Xbox Game Pass, featuring more than 100 games for $9.99 a month and including even brand-new titles the day they release. As of January, Game Pass had more than 18 million subscribers, and Microsoft's aggressive investment in a subscription future has become a catalyst for an industrywide reckoning on the likelihood and viability of such a model becoming standard.

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Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
Protocol | Policy

Lina Khan wants to hear from you

The new FTC chair is trying to get herself, and the sometimes timid tech-regulating agency she oversees, up to speed while she still can.

Lina Khan is trying to push the FTC to corral tech companies

Photo: Graeme Jennings/AFP via Getty Images

"When you're in D.C., it's very easy to lose connection with the very real issues that people are facing," said Lina Khan, the FTC's new chair.

Khan made her debut as chair before the press on Wednesday, showing up to a media event carrying an old maroon book from the agency's library and calling herself a "huge nerd" on FTC history. She launched into explaining how much she enjoys the open commission meetings she's pioneered since taking over in June. That's especially true of the marathon public comment sessions that have wrapped up each of the two meetings so far.

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Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

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