Magic Leap

Development, Manufacturing and Launch Plans

Nicholas Ng – April 2016
Hello, I’m Nicholas.
I want to work at Magic Leap, I believe in the vision and I’m excited to make it a reality. I know thousands
of other very talented people do as well. So I've decided to be proactive and show the kind of value I’d
bring to the team by putting together a report of how Magic Leap should develop, scale and launch.

Given that Magic Leap is in stealth, most information out there is PR-driven. This report represents over
300 hours of collective research on Magic Leap’s patents (photonics, lightfields, mixed reality etc.),
industry knowledge and product risk mitigation analysis to build the best picture I possibly could on Magic
Leap and truly add value to readers out there. It’ll be great to hear any feedback.

The roles I'd most like to join are:

Program Manager - magicleap.com/#/job-post/145081
Project Manager - magicleap.com/#/job-post/177030
Please scroll through the report and get in touch!

Contact details are at the end. You can also find out more about me at www.nicholas-ng.com.

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TLDR: ML’s biggest challenges are developing/shrinking tech,
scaling production and market launch

Potential to lead the $ 1.6tn MR/AR market (2035) is huge but some areas of concern:
• Product Development – Photonics is still very new, and shrinking the scaffolding prototype to a glass form factor will prove very challenging.
• Scaling & Manufacturing – Moving from prototype to millions of units is a huge manufacturing hurdle.
• Launching – Chinese markets are hard to penetrate; CE demand is slowing; ML could be too early for its time; heated competition from tech giants.

Solid program/project management is a recommended next step:

• Break product development challenges (e.g. photonics, miniaturization) into scaffolding/HMD/glass phases.
• Gradually ramp manufacturing from prototype, to LVM methods, then to HVM.
• Sandbox in other developed Asian countries first, start from B2B, then consumer markets.

How I can help in a program/project management role:

• Drive Programs/Projects Forward – Getting things done, helping teams to remove roadblocks or stepping in to get my hands dirty!
• Strategic Planning – Develop scope, resource, timeline; analyze, identify and mitigate risks.
• Building Cross-Team Relationships – Syncing, understanding and empathizing with different teams to solve problems and take corrective action.

Terminology used in report: AR = Augmented Reality, MR = Mixed Reality, VR = Virtual Reality, TLDR = Too long didn’t read, ML = Magic Leap 3
Section A: Why and what is Magic Leap

Tech cycles tends to last ~10 years each. What’s next?

Mainframe Mini Laptop Mobile Wearable

Personal Computing
Computing Computing 1980s
Computing Computing Computing
1960s 1970s 1990s 2000s 2010s+

Each generational shift has consistent patterns, the next devices will be:
• Move even closer to our body and eyes: More personal than ever before
• Smaller, more mobile and follow us closer as we spend more time with them: We will be more dependent on them than ever before
• More affordable, wider appeal and higher adoption: More mainstream than ever before 4
Source: KPCB Mary Meeker
Section A: Why and what is Magic Leap

Magic Leap will take us from Smartphones to a new future reality

Evolving away from Smartphones and changing the way we interact with our world forever

Smartphones are clumsy ML removes physical screen boundaries Using cutting-edge technologies

Awkward posture Create & Discover Mixed Reality Lightfields

People use them while hunching for hours. The world turns into our canvas. Magic Leap creates virtual objects in the real world that are
indistinguishable from reality.
Not immersive Play
Limited by small screen sizes. The world is now our game console screen. Final hardware target
Larger than average pair of sports sunglasses wired to a square
pack that fits in your pocket.
Demanding on senses Know & Learn
Constant one-handed, intensive hand-eye coordination. The world becomes our classroom teacher.
How it works
Mobile computer creates images that are projected via optical
No privacy Entertain fiber and holographic waveguides directly into the eye, while
The person beside you can peek at your screen too. The world is our personal stadium. remaining physically and socially comfortable to the user.

Anti-social Share
We feel guilty using them in front of friends. Everyone can experience this new world with Magic Leap.

5
Section B: Where is Magic Leap now

And ML faces challenges in areas that I can help immediately with

Goal :
Launch a fully Product Scaling &
formed product to Development Manufacturing Launching
the public
Section C Section D Section E - H

Preferred Contribution
Product Development Scaling & Manufacturing Launching
My Background • Samsung: Shipped hardware products, program • Dell: Previous procurement strategy, • Tribesports: Market launch, business
management and product development of next- negotiation and supply chain experience with development and partnerships to grow user
gen display technologies (Retinal Projection, VR) Chinese and Taiwanese contract adoption and retention
• Samsung: Product innovation (smartphones, manufacturers • Samsung: Product strategy and innovation
robots) (display technology, smartphones, robots)
• Dell: Scenario analysis and market strategy

Positions at ML • Program Manager (magicleap.com/#/job- • Strategic Sourcing Manager, Optical • Business Development Associate
that I’m keen in post/145081) (magicleap.com/#/job-post/112018) (magicleap.com/#/job-post/179993)
• Project Manager (magicleap.com/#/job- • Strategic Sourcing Manager, Mechanical • General Submission (magicleap.com/#/job-
post/177030) (magicleap.com/#/job-post/112025) post/106781)
• Lead NPI Program Manager
(magicleap.com/#/job-post/172625)

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Following pages will go through proposed solutions & approaches in detail
Section B: Where is Magic Leap now

Magic Leap’s vision is “To ‘blow away’ our inner 11-year-olds”

The world has not seen something so game-changing since Apple’s Macintosh in the 1970s

The Experience How It Works

1 Mixed Reality Lightfields 3 Magic OS

• Images are reverse engineered to what we would see in • Magic Leap’s own operating
real life by generating/manipulating light data. system will run its own apps,
• using an SDK that powers a
• Magic Leap creates a mixed- Tiny projector built into optic fibers channels light
private beta.
reality where virtual objects are toward a single see-through lens onto the retina to
indistinguishable from reality. It create large FOV, low-latency visuals.
makes it possible to see digital • Sensors track your eye and environments to
images like monsters as though automatically adjust images and focus.
they are re actually in front of 4 Mobile computer
you. • The result is the same natural way your eyes/brain
neurologically perceives real life objects. • Magic Leap is a small, light,
• The final hardware target is a self-contained, complete
larger than average pair of computer.
sports sunglasses wired to a 2 Comfortable and socially adept •
square pack that fits in your Input method uses physically
• Magic Leap sits comfortably on the head and people crafted objects and
pocket.
won't be shy to wear it in public. computational projection on
• Allows for talking, eye contact and normal relationships everyday objects (i.e. totems,
with people while in use. fingers, gestures).

7
Source: MIT Technology Review
Section B: Where is Magic Leap now

Magic Leap is in simultaneous development and production

Hardware Engineering Manufacturing

Mass miniaturization and module nanofabrication phases: Aligning manufacturing and hardware development is
challenging because each has moving targets. Currently in
• Optics: MEMS SLMs, calibration etc. private pilot production cycle:
• Photonics: material sciences, custom chip and fab
process design etc. • 259,000 sq. ft, ex-Motorola manufacturing facility
• Mechanical and opto-mechanical systems • Work with contract manufacturers (ODMs/OEMs) to
•
•
Connectivity (Radio, Bluetooth, WiFi)
Sensors: eye tracking, iris recognition etc.
Goal is to launch •
ramp up production volumes
Setting up and scaling facilities and equipment
a fully formed •
•
Line and production automation process planning
Mechanical and opto-mechanical manufacturing
Software Engineering product to the Production test runs
• Yield optimization
Initial demos and first releases: public • Quality and reliability testing
• SDK development and finalization
• AI algorithms: machine learning, deep learning etc. Design & User Interaction
• Backend development: Cloud APIs etc.
• Product and software visual design
• Frontend development: OS, graphics engine etc.
• Interaction design
• Computer vision
• User experience
• Audio testing, embedded firm/software and drivers

Supply Chain & Operations

Marketing & PR • Strategic sourcing
• Press releases Creative Production • Supply/demand planning/forecasting
• Demand analytics, sales forecasts • Content, gaming & app partnerships
• Digital marketing • Character/environment design, visual/audio
development and production

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Section B: Where is Magic Leap now

Magic Leap has unprecedented support and traction

Enormous potential to become a $ 1.6 Trillion market by 2035

Investment benchmarking: ML, FB, Uber MR/AR market size forecasts Magic Leap as % of total AR/VR investments
$ millions, Seed round to Series C $ billions, 2016F – 2035F $ millions, Seed round to Series C
1,747
793.5 Magic Leap
2016F 0.5
Others
2017F 4.0
542 45.4%

2018F 15 171%
375 2019F 49 52.9%
714.9
258
2020F 90
82.8% 54.6%
50 2025F 680 193.9
0 0.5 12.7 37
27.5 22.1 26.5
1.5 11 17.2%
2035F 1,589
Seed Series A Series B Series C 2011 2012 2013 2014 2015 &
2016Q1

1 Magic Leap funding exceeds that of 2 MR/AR is set to explode: $90B by 2020 and 3 52% of all MR/AR/VR investments are
Uber and Facebook combined $ 1.6tn by 2035 going into Magic Leap

9
Source: Crunchbase; TechCrunch; Fast Company; Citibank; Digi-Capital; Fortune
Section C: Product development

Problem: Magic Leap is battling development on 3 big fronts

Given Magic Leap is in stealth, status and development challenges are hard to guess (Reddit has been helpful )

Hardware is hard Cutting edge tech comes with high risk Shrinking takes years of investments
Time and resource intensive Silicon photonics is in its infancy Being pioneers in the field
Development can span years, require large specialist teams, Few companies have successfully delivered commercial Magic Leap has been trying to shrink down from the first
and collaboration between hardware, software, design, photonic chips (closest is probably IBM), with most of the work scaffolding prototype since 2011, and is successful in getting it
marketing etc. on the area remaining in research labs. smaller. But cramming the electrical/photonics components,
sensors and improving the FOV and resolution in a sunglass
form factor is something that hasn’t been done before.
Little room for iteration Starting from scratch
Unlike software where updates are used to patch, once past Magic Leap has to succeed where no one has before: photonic Retaining the experience
the “go to tool” or “ship” milestones, you’ve invested millions chip design, materials and building Magic Leap’s own chip fab
Current shrinking efforts results in a product that can’t match
in a mold or the product is in consumers’ hands, making it hard (down to fab design and fab techniques) which is tricky and
the impressive experience of the scaffolding prototype.
to make design changes or make recalls. very expensive.

And so much more… Success depends heavily on photonics Low cost and high yield process
Magic Leap needs an economical, reliable and repeatable
Planning supply and demand, establish global distribution For Magic Leap to deliver the experience it wants, it needs to
shrinking method.
channels and at the end, you still have to do the software! get photonics right, which leaves little room for risk hedging.
10
Source: Digi-Capital, Goldman Sachs
Section C: Product development

Solution: Magic Leap can tackle development in 3 phases

Start from scaffolding prototype, to large head mounted format, then to glasses form factor

Scaffolding Head-mounted Glasses

From Magic Leap’s patent analysis, Magic Leap’s final product To further develop and help shrink the scaffolding prototype To develop and shrink Magic Leap into the final sunglass form is
plans to accomplish the following display system: down to be able to be mounted on the head, several avenues really going into the unknown. Just like how computers to 50
could be helped to hasten the transition: years of concerted global R&D to go from room-sized to palm
Projection device that projects an image towards the sized, it’s hard to say how long and how much Magic Leap needs
1 viewer's eye and is transparent when no image is
1 Hire experts to help with photonics/optics fabrication to do that in fields like photonics, optics and sensors. Someareas
projected (e.g. waveguides, photonic ICs, SLM etc.) of concern and processes that could help are:

Light-blocking layer that can selectively block light from Partnerships with organizations and academic institutes System innovation: novel shielding methods, radical
2 outside the device in locations where the projection
2
who are leading photonics experts. IBM, MIT, UC
1 thermal management systems or new methods of power
device is projecting an image Berkeley, and University of Colorado Boulder are at the management to increase battery life and reduce power
forefront of this research. consumption and heat generation
“Zone plate diffraction patterning device" that sits
between the projection device and the viewer’s eye, and Acquire rights and technology, enter joint ventures or co- IC innovation: like packaging/mounting methods or die
3 causes light to pass through a variable diffraction 3 investments with fabricators and research institutes 2 shrink
pattern. This likely creates the 3D effect and alters the
image so it appears at the desired distance from the Leverage on existing sensor platforms: Kinect, Leap Materials/fabrication innovation: like how LIGA used
viewer. 4 Motion, Sixense 3 etching/molding instead of subtractive manufacturing
which shrunk components significantly
Magic Leap’s scaffolding prototype also needs the following Begin preparing for manufacturing:
subsystems: • NPI to plan, direct and coordinate new product and process The biggest fear is that Magic Leap is held back by the limitations
• Mechanical chassis development programs by providing technical guidance or of physics.
• Sensors: motion control, positional and eye tracking assessment in the design, development, assembly and testing
• Computing unit: CPU, AP, GPU, Connectivity • Product/marketing requirement documents to be drafted
• Software: Operating • Production/project support systems e.g. PLM, PDM and ERP

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Section D: Scaling and manufacturing

Problem: After PD, Magic Leap needs to scale efficient production

Solution: Start from prototype, to low volume manufacturing, then to high volume manufacturing

High volume manufacturing

Prototype (1 to 10) Low volume manufacturing (1,000s) (1,000,000s)
Goal: Confirm manufacturing parameters
Goal: Fully functional prototype within final design Goal: Cost reduction, increased yield, shorter time
• The challenge is to prepare production so that the small build
• It is difficult to move from research-lab prototype to volume accurately represents high volume manufacturing. • It can be challenging but critical to improve on yield rate
affordable, comfortable consumer product. Prototypes are because at large volumes, a 1% yield drop can billions of
one thing, scaled commercialization is another. • Design for Manufacturing (DFM): Design and engineer the dollars of impact on the bottom line of the company.
product to reduce its manufacturing costs and allow problems
• Prototypes are usually cruder 3D prints or one-off designs, so to be fixed early on (least expensive place to address them) • Production Validation Test (PVT): Can we build tons of units
great efforts must be put on prototyping, which involves: that that function as expected, look great, and go together
understanding the product well enough to quickly identify • Engineering Validation Test (EVT): Can we build several units quickly and easily every time, meeting all functional
and rectify failures as production volumes increase. that function as expected, meeting requirements, cosmetic/appearance requirements, with great
all functional requirements? manufacturability metrics, i.e. process capabilities, first pass
• Although an iterative and dynamic process, the team has to yield, rolling throughput yield?
refine and finalize engineering (hardware/software) & design. • Design Validation Test (DVT): Can we build a lot of units that
function as expected and look great, meeting all • Increase and streamline manufacturing lines to scale volume.
• Production and project support systems must be in place. This functional requirement and cosmetic requirements?
includes: PLM, PDM and ERP systems. • Finalize BOM and COGS to track inventory, costs and
• Supply chain, operations, production and sales forecasts: financials.
• Product/marketing requirement documents have to be ready Demand should match production supply/capacity.
so all teams have a common frame of reference. • Endpoint quality control, testing and packaging
• Source, consult and negotiate with contract manufacturers.
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Section E: Market launch

Problem: China is hard for foreign companies to penetrate

Payoff is huge: MR/AR/VR revenue in Asia (mostly China) will be more than twice of U.S. by 2020

1 China is an important market for Magic Leap 2 Magic Leap brought Alibaba in to help with China
Chinese Consumption Will Triple by 2020 Eyes and ears in China
Nominal Private Consumption, $ trillions, 2020F For entry in a respectful and sensitive way, to succeed where others have failed.
15.0
Consumption Growth, 2015 - 2020
China’s spend will
2.6 triple by 2020 Aligned vision of the future
Consumption, 2015
Alibaba understands the right way to use Magic Leap to revolutionize e-commerce.
China has the fastest growing
consumption now and will
surpass the U.S. to have the E-commerce applications
6.5 Solving the disconnect faced by 400 million people on Alibaba: buying physical items but being unable to see
12.4 highest overall spend by 2024
(not shown on graph) them with your own eyes.
4.2 3.0 2.8
0.4 2.2 0.4 2.1
1.3 0.3 1.7 0.4
2.3 2.4
1.6 1.8 1.8 1.3
3 But this isn’t enough
U.S. China India Japan Germany UK France

MR/AR/VR Regional Revenue Chinese consumers are fickle sophisticates

Brands have typically been successful in either U.S. or China but not both (e.g. Samsung, Xiaomi) except Apple
$ billions, 2020F because of its brand status. If Magic Leap decides to be a brand, this will be an issue.
Others
11.25
China = double U.S. Policy disadvantages
Foreign companies complain that regulations fiercely protect local players and make it hard for them to
40.05 Asia
MR/AR/VR revenues compete fairly, requiring relationships (关系 or guanxi) with key stakeholders.
U.S. 18.45 U.S. and China will control 65% of all global
MR/AR/VR reality revenue, with MR/AR 3X Reverse engineering and product commoditization
of VR’s. China’s cheap clones, localized versions that become more popular that the original make foreign companies
wary of IP theft.
Europe 20.25

13
Source: Economist Intelligence Unit; BCG Analysis; Digi-Capital, Telegraph
Section E: Market launch

Solution: Start with other Asian markets first

SG, SK, JP, HK and TW: higher ARPU, and better conditions for a successful Magic Leap launch
Asia Spend per Capita (Primary) and Absolute (Secondary)
1 Propensity to adopt new tech and favorable conditions $ 000s (Primary), $ trillions (Secondary), 2014 – 2016
22.4 3
More willing to pay for the latest and greatest 21.9
While China remains the 2nd largest in terms of absolute private consumption; Singapore, South Korea, 20 2.8
2.3
Japan, Hong Kong and Taiwan are likely to generate more revenue per user.
2
12.4 11.8
Exceeds China in Internet bandwidth and penetration
Magic Leap requires intensive bandwidth and widespread 4G LTE adoption for the best user experience for a 10 8.0
favorable launch and positive press. 0.6 0.9 1
0.2 0.2 1.4
0.1 0.7
2 Better pro-tech and pro-startup national policies/grants 0 0
Japan Hong Kong Singapore South Taiwan China India
National technology sandboxes Korea
Singapore and South Korea has committed $14 and $11 billion to tech R&D respectively, aiming to be a
poster child for entrepreneurship. E.g. encouraging disruptive tech like Uber. Asia 4G Speeds (Primary) and Penetration (Secondary)
Smaller = Easier to manage Mbps (Primary); %(Secondary), Sep 2015
A smaller launch can help Magic Leap learn more about Asia, perform tests and prepare for China. 100
33 97 90
29 86
30 84
3 Successful case studies 76
73
18
Singapore Smart Cities 20
14 50 50
Singapore’s strategy is to be the international guinea pig for technologies for the world to replicate. Case in 13
11 10
point: Singapore has won a contract to build a smart city in India 10 times its own size.
10
Apple, Samsung and Sony Product Launches
Consumer tech companies have traditionally placed SG/SK/HK/TW/JP in the first wave of launches. 0 0
Singapore South Taiwan Japan Hong Kong China India
Korea
14
Source: Opensignal, World Bank, United Nations, CNA, Business Korea, Guardian, Wired, Allchinatech, Chinadaily
 Section F: Business verticals

Problem: Crowded CE space has peaked, sees slow demand

Solution: That also means the $ 700bn market is ready to be disrupted with MR/AR/VR which is just getting started

Price and Volumes for Major CE Products

Millions of units and $, 2010 – 2035F
Units (mn units)
10,000 Purchase Intent Rate for Major CE Products Decrease in purchase intent
2015
2020 Lifecycle of CE No change in purchase intent
2025 Products %, 2015 – 2016
Increase in purchase intent
2030
2035

Smart-
phone
HMD 1,000
Smart- Laptop TV Tablet Smart- Fitness WiFi Smart Drone
phone watch Monitor Camera Thermo
2016 Purchase
48% 30% 30% 29% 13% 13% 11% 9% 7%
Tablet Intent Rate
2015 Purchase
100
54% 36% 38% 38% 12% 12% 10% 9% 6%
Game Intent Rate
Console
% Point Change
-6% -6% -8% -9% +1% +1% +1% 0% +1%
Over 2015

Laptop
TV Smartwatch

ASP ($)
They are also seeing sinking demand, and are ripe for disruption
10
10,000 1,000 100 10 • Smartphones, laptops, TVs and Tablets are seeing decreasing demand year-on-year.
• Even other very recent categories are seeing tepid, unenthusiastic growth.
$ 700bn CE market is entering twilight
• Smartphones ($ 450bn), Laptops ($ 110bn), TVs ($ 90bn), Tablets
($ 50bn) were a $ 700bn market in 2015.
• Only MR/AR/VR is early in its lifecycle, far away from peak value

15
Source: Citibank, Statista
Section G: Product

Problem: Magic Leap may become like Google Glass

Solution: Ensure tech maturity, validate market, assure users of safety/privacy and make it less socially awkward

Glass Ceilings (Problems with Google Glass) Magic Breakthroughs (What Magic Leap can do)
Poor product experience Perfecting the experience in niche segments
Developer kits were priced too high, was functionally handicapped (e.g. poor display, interface By not committing to a release date, Magic Leap can deliver the perfect gaming, media and app
lag), and while capable of doing many things, did not do a single task well. experience, in areas where the technology excels and is actually useful.

Inconsistent product direction Product focus in “Stealth” mode

Glass was divided between being an always-on fashionable device versus a only-when-you-need- Magic Leap is on its mission to transform creating, discovery, playing, knowing, learning,
it utility device, yet went ahead with a huge, flashy launch and demo video. entertaining and sharing, away from public eye until they are clearly defined.

Socially awkward Resemble existing headwear and fashion partnerships

Glass comes between people when they are talking in real life as a physical and attention barrier, Make the device look no different from a normal pair of glasses or sunglasses, and work with
and is seen as a “geek” toy instead of a head accessory like sunglasses. fashion houses for brand leverage and design for mainstream acceptance.

Worries over privacy Pro-privacy policies and physical kill-switch

Bystanders are concerned over their involvement without their consent, while wearers are Enforce a strict privacy policy that protects the user, and have a physical switch or shield to
worried about the enormous amount of intimate data collected about them. disable all cameras, sensors and data-collecting modules.

Health and safety concerns Safety advocacy and assurance

People are concerned with placing a display and a wireless device which is transmitting and Advocacy on how retinal projection is the natural way how our eyes perceive images and since
receiving high bandwidth signals so close to their faces and brains. the wireless modules are stored in pockets, risks are no different from smartphones.

Missing market validation Define and validate market

Google identified the wrong audience/demand, recruited early adopters (geeks and tech Talk to people about the product (e.g. ethnography, desk/field research, focus groups etc.) to
journalists) who gave bad reviews and failed to articulate/market glass in precise terms. define customers and early adopters, then iterate on the product until there is a fit.

16
Section H: Product

Problem: What if Magic Leap is like the first smartphone?

The first Smartphone launched in 1994, but took 20 years of iterations for the world to catch up to mainstream adoption

IBM-BellSouth’s Simon Personal

Computer was the first Smartphone
Myth: Human behavior evolves at the same pace as commercially available in 1994
(before the word “Smartphone” existed)
technology
Most think that people are quick to adopt revolutionary, game-changing technology
like the Smartphone. Wrong:

The Smartphone had a painful product journey for nearly 20 years before
1 it got really popular outside tech circles.

Humans are creatures of habit. New, successful products respect the

2 familiar way people use things, and add a layer that people perceive as
added value. People need time to catch up with revolutionary tech.

Magic Leap needs to:

Ensure it helps people do what they want to get done, in a better, more
1 useful and enjoyable way than existing solutions.

Clearly articulate what problem and pains for users it is solving

2 immediately over existing devices.

17
Section H: Product

Solution 1: Start from niche areas and provide genuine value

Magic Leap needs to go beyond the usual gaming, video entertainment and movie use cases

1 First markets for MR/AR/VR disruption: 2 Creating genuine product value:

• Real Estate: Sotherby’s is showing luxury home in AR/VR, potentially disrupting $ 52bn US real estate commissions market;
and Lowes has 6 stores equipped with “Holorooms” to help customers envision their home remodeling plans and get a
competitive advantage in the $ 180bn US home improvement market.
• Retail: Reduce need for in-store display inventory and accelerate erosion in value of physical stores to the extent the
viewing experience can be deployed in the home and via mobile devices.
• Healthcare: Doctors experimenting with AR/VR as a hands-free medical tool, playing into a $ 16bn patient monitoring
device market

MR/AR/VR Market, User and Software Revenue Estimates

$, people, 2025F
• Local Innovation: Products have to address needs and
Current market size Addressable MR/AR/VR Population 2025F 2025F
users SW sales problems in a local context. For example:

Real estate $ 107bn in US, JP, UK, GER 1.4mn real estate agents in US, JP, UK, GER 300k $ 2.6bn
• While UberX works in most parts of the world, Uber
had to launch UberMoto that catered to the
Retail $ 1.5tr ecommerce market 1bn+ online shoppers and in-store shoppers 31.5mn $ 1.6bn popularity of bike taxis in India.
Healthcare $ 16bn monitoring devices ~8mn physicians and EMTs in developed markets 3.4mn $ 5.1bn • While Spotify subscriptions are billed on credit cards,
Videogames $ 106bn videogame market ~230mn install base of game consoles 216mn $ 11.6bn
Indonesia had low card penetration so Spotify
developed a system that accepts cash.
Live events $ 44bn live sports ticketing ~715mn World Cup viewers, ~92mn ESPN subs 95mn $ 4.1bn
• Magic Leap could benefit from custom hardware,
Video $ 50bn Netflix TAM ~450mn Netflix households 79mn $ 3.2bn software and content for each country/region.
Education $ 12bn K-12/higher education ~200mn in developed markets 15mn $ 0,7bn • Crowdsource: By building in a hardware expansion port, we
allow communities to figure out the best use for Magic Leap
Engineering $ 20bn engineering software ~6mn engineers in US, EUR, JP 3.2mn $ 4.7bn and empower them to build solutions while Magic Leap could
Military $ 9bn defense simulation ~6.9mn military personnel in “high income” countries 700k $ 1.4bn benefit from hardware licenses as an alternate revenue stream.

TOTAL 444mn $ 35bn

18
Source: Goldman Sachs
Section H: Product

Solution 2: Execution is critical to the success of Magic Leap

Magic Leap needs clear business / monetization, adoption / marketing and distribution / channels

Additional revenue from royalties Demo real use at events Is volume or revenue priority?
Hardware and accessory sales Show off real use Direct or resellers
MR/AR hardware revenue is projected to be $ 26bn (2025), • Set up booths in malls where people can experience how
Magic Leap has to determine if selling direct (online and retail)
additional revenue can be obtained from expansion port / Magic Leap transforms the way they shop. or going with a distributor-reseller channel model with retail
accessory licensing. (Apple’s MFi program charged $10 per • Provide live translation of signs and menus for tourists for partners that includes incentives, promotions and margin play
device, translating into billions of dollars of revenue) hotel guests, travelers at airports and help centers. is benefits unit sales and revenue.
• Give overlay commentary to users whoa re watching a live
match at a stadium (e.g. NFL, F1, Wimbledon).
Apps and content ecosystem Pricing
Magic Leap can take a cut of all apps and content
purchased/distributed on its ecosystem, similar to the current Event / content partnerships Determine ideal launch pricing for Magic Leap to maximize unit
We can also consider event partnerships (e.g. fashion, car sales and revenue.
Apple and Play Stores. Apple made $ 6.3bn in app distribution
revenue in 2015 alone. shows, marathons etc.) as part of a go-to-market strategy,
after compatible and possibly exclusive content partners which
Magic Leap already has (e.g. Legendary, Weta etc).

19
Source: Digi-Capital, Goldman Sachs
Section I: Competition

Problem: Magic Leap is likely the most complex and latest

Solution: Remain stealth for the long haul; get it right by addressing and making it accessible to mass markets
MR/AR/VR Competitive Analysis
Market/Cost versus Speed/Complexity

Mainstream (Large Market, Low Cost)

MR/AR will be bigger but more complex than VR
MR/AR MR/AR products are concentrated in the upper right: potentially lower ownership cost
1 (no need for a separate computer) and being useful to the masses (unlike VR which is
Google mostly gaming).
Cardboard
But this is all at the expense of difficult execution, lengthy development cycles due to
2 technological complexity (holographic technology or retinal projection). In contrast, VR is
Samsung easier to execute (using existing screens and motion sensors).
Magic Leap
Gear VR Meta
Magic Leap will be the end-game winner in MR/AR:
Google Microsoft

Easy Execution
(Quick-to-Market,
?
Apple
Glass Hololens

Hard Execution
(Slow-to-Market,
3
Everyone, with the exception of Magic Leap and Avegant, uses stereoscopic 3-D that
tricks your eyes and makes you dizzy and nauseous. Both Magic Leap and Avegant uses
retinal projection that has a large FOV and higher resolution that creates vivid images
naturally.
Low Complexity) High Complexity)
Sony Avegant is positioned as “mediawear”, a personal theatre for video entertainment, which
is limiting in use case. This leaves Magic Leap as the eventual winner, with limitless use
Playstation VR
Avegant 4 cases, has an enormous market and because of healthy funding, has the potential to get
Glyph the product to a price point accessible to mass markets.
Facebook
Magic Leap should fiercely defend its proprietary intellectual property: strengthen legal
Oculus Rift
5 team, file more and deeper patents, license out technology or engage strategic partners
to defend IP.

HTC
Vive
Niche (Small Market, High Cost)
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Section J: Summary

What I can do to help and benefit Magic Leap immediately

Preferred Contribution

Area Product Development Scaling Production Market Launch Business Product Competition
Problem Photonics and Moving from prototype to Launching in Asia Demand for consumer Could MR be too early for Multiple competitors are
miniaturization will be millions of units is a (especially China) is very electronics is slowing its time? launching technically
difficult manufacturing hurdle different from America simpler solutions earlier

Solution Tackle technical challenges Ramp from prototype to Sandbox in other Create new product Begin consumer adoption Remain in stealth until the
in stages: Begin from small volume developed Asian countries category and disrupt the 4 from B2B (real estate, product is ready, then
scaffolding form factor, to manufacturing, and finally first, to test run systems largest CE markets: retail, healthcare), ensure that it addresses
head mounted, and finally to large volume while preparing for a Smartphones, Laptops, TVs, providing real value and consumers’ needs and is
larger launch in the
to sunglasses manufacturing Chinese market Tablets totaling $ 700bn in having strong marketing, affordable
2015 monetization and
distribution

My • Project/program • Procurement and • Market launch at Tribesports • Product innovation at Samsung

background management at supply chain with • Business development and partnerships at Tribesports • Strategy at Samsung and Dell
Samsung contract manufacturers • Product Strategy at Samsung
• Product innovation at at Dell
Samsung

Current open • Program Manager • Strategic Sourcing • Business Development Associate • General Submission (magicleap.com/#/job-
roles (magicleap.com/#/job- Manager, Optical (magicleap.com/#/job-post/179993) post/106781
post/145081) (magicleap.com/#/job- • General Submission (magicleap.com/#/job-
• Project Manager post/112018) post/106781
(magicleap.com/#/job- • Strategic Sourcing
post/177030) Manager, Mechanical
(magicleap.com/#/job-
post/112025)
• Lead NPI Program
Manager
(magicleap.com/#/job-
post/172625

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Section J: Summary

My background can add value to the Magic Leap team

Area Open Positions at Magic Leap My Relevant Experience
Portfolio Management: Develop and scale:
• Program Manager (Program Operations) • Samsung: Shipped new display products and developed emerging display technologies (Retinal Projection, VR) ,
smartphone and robot projects.
Hardware Engineering, Program Management: • Samsung: Managed large-scale projects by working with Engineering, Design, Marketing etc. teams and reporting
Project • Project Manager (Hardware Development) to executives for entire product lifecycle.
Management • Academic background: Mechanical Engineering (Undergraduate) and Operations Research (Graduate)

Provide product direction and vision:

• Samsung: Established product strategy (2017-2019 roadmap) and created new revenue/demand for next-gen
displays and “beyond living room” use cases.
• Samsung: Product innovation, developed consumer (not tech) driven concepts using insights uncovered by
market research and ethnography in South East Asia.

Supply Chain & Operations: Contract manufacturing and mass production:

• Lead NPI Program Manager • Dell: Previous procurement strategy, negotiation and supply chain experience with Chinese and Taiwanese
• Strategic Sourcing Manager (Optical) ODM/OEM partners.
Sourcing • Strategic Sourcing Manager (Mechanical)

Business Development: Market launch, business development and partnerships

• Business Development Associate • Tribesports: Familiar with Asian markets. Started Tribesports in Asia on my own and from scratch. Led product
launch, user growth and partnerships.

Business
Development
Human Resource: Everything else
• General Submission • Eric Schmidt told Sheryl Sandberg in 2001, "If you're offered a seat on a rocket ship, you don't ask what seat, you
just get on.
Everything
Else
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Section K: Why I love Magic Leap

Why I belong in Magic Leap Why did I do this

What my resume doesn’t say We share the same vision

Passion
I absolutely believe that Mixed Realities will be integral to our future world.

Global Citizen Infancy

10 years of relevant professional/academic experience in 5 countries, speaking I’ve always been frustrated with how badly mass-market augmented reality works.
English/Chinese and making friends from all over the world has allowed me to (e.g. Layar in 2009)
focus on building cross cultural/technical bridges.

Love Startups
I miss working in a startup environment (used to be in one): getting my hands
dirty, surrounded by passionate and smart people working together towards a A Personal Mission
seemingly impossible goal. Fast forward 7 years, nothing has changed. A historical abandoned railway tour I
went to last year promised visitors a personalized tour and immerse them in a
curious mix of history and technology (e.g. see how the old trains arrived at the
Child Tinkerer station etc.) using augmented reality. The experience was atrocious. I left the tour
I’ve been building and fixing computers, mini solar race cars and gadgets since I wondering “why did it have to be this awful?”
was 12. Magic Leap is an innate extension of my childhood.

Pushing the Envelope Get Moving

I hate sitting still; I’m always curious and believe in always challenging the status Frustrated with how things are still the same, I saw Magic Leap and decided to join
quo, yet I love making complicated things simple, so technology become you guys and to take things into my own hands.
accessible and fun.
(This slide’s background shows how bad that railway app is: Trains were coming
out from the sky when it was supposed to be on the ground.)
Seat on a Rocket Ship
I recognize that Magic Leap is an opportunity of a lifetime to be a part of
something big. Hope to get a ticket!

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Thank You!
Nicholas Ng
Email: nicholas.ngjf@gmail.com
Web: www.nicholas-ng.com
LinkedIn: http://www.linkedin.com/in/nicholasngjf

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