4 ms·

You have to look at this valuation (and things like Facebook's Oculus investment, etc.) as these big companies trying to figure out what is going to come after

You have to look at this valuation (and things like Facebook's Oculus investment, etc.) as these big companies trying to figure out what is going to come after smartphones. Whatever does is going to print money and own an ecosystem for a couple of decades. What is that worth? Today: Apple's about to cross the $1 trillion cumulative revenue milestone iOS. Android's generated revenue of $31 Billion [2] In a world where Apple is suing Qualcomm for $1B over fundamental networking chips. Even if MagicLeap does nothing but license their patents to all the other tech players, could they still be worth $8B dollars? 1 - https://9to5mac.com/2017/01/11/apple-1-trillion-in-revenue-from-ios/ https://9to5mac.com/2017/01/11/apple-1-trillion-in-revenue-f... 2 - https://www.bloomberg.com/news/articles/2016-01-21/google-s-android-generates-31-billion-revenue-oracle-says-ijor8hvt https://www.bloomberg.com/news/articles/2016-01-21/google-s-...

roymurdock 9y ago
Sure, look at a comparable "AR" company. Snap generated $150M in revenue last quarter, and is valued at $24B (market cap). Magic Leap would need to generate $50M quarterly, or $200M annually to sit at a comparable valuation multiple. Given that they are working on an enterprise/industrial AR play (not selling ads to consumer like Snapchat), and that the enterprise/industrial AR market is in the $billions for yearly revenues, I think this valuation is totally feasible. Facebook, Google, and Microsoft will play in the mix, but the market for industrial/enterprise AR will be big enough to sustain a few large players. Obviously only time will tell as it's impossible to evaluate what Magic Leap is actually developing and selling at this point.
- AndrewKemendo 9y ago
  Given that they are working on an enterprise/industrial AR play Where are you getting that from? Everything they are about is experiences for the home user in an entertainment context.
  - roymurdock 9y ago
    Interested to see any lit that confirms which mkt they are targeting? No clear message from the company, just some demos of 3D simulated objects. Could be applied to any vertical mkt/industry at this point from what I can tell. My overall point is that the $8B valuation could be justified if they are targeting a large multi $B yearly revenue market.
acchow 9y ago
Apple didn't invent the smartphone. Nvidia didn't invent the GPU. Facebook didn't invent social networks. Google didn't invent the search engine. Pioneeering is expensive and usually doesn't pay off as well.
- smacktoward 9y ago
  There's an old saying: "you can always tell the pioneers, they're the ones with all the arrows in their back."
tanilama 9y ago
Surely won't be AR/VR though. I still cannot imagine why regular people need them besides gaming. At least with smartphone you can browse the internet anytime. What is AR/VR's killer selling point??
- ebalit 9y ago
  Replacing every screen you own for a start.
mbesto 9y ago
In other words - FOMO.

roymurdock 9y ago

Sure, look at a comparable "AR" company. Snap generated $150M in revenue last quarter, and is valued at $24B (market cap). Magic Leap would need to generate $50M quarterly, or $200M annually to sit at a comparable valuation multiple. Given that they are working on an enterprise/industrial AR play (not selling ads to consumer like Snapchat), and that the enterprise/industrial AR market is in the $billions for yearly revenues, I think this valuation is totally feasible. Facebook, Google, and Microsoft will play in the mix, but the market for industrial/enterprise AR will be big enough to sustain a few large players. Obviously only time will tell as it's impossible to evaluate what Magic Leap is actually developing and selling at this point.

AndrewKemendo 9y ago
Given that they are working on an enterprise/industrial AR play Where are you getting that from? Everything they are about is experiences for the home user in an entertainment context.
- roymurdock 9y ago
  Interested to see any lit that confirms which mkt they are targeting? No clear message from the company, just some demos of 3D simulated objects. Could be applied to any vertical mkt/industry at this point from what I can tell. My overall point is that the $8B valuation could be justified if they are targeting a large multi $B yearly revenue market.

acchow 9y ago

Apple didn't invent the smartphone. Nvidia didn't invent the GPU. Facebook didn't invent social networks. Google didn't invent the search engine. Pioneeering is expensive and usually doesn't pay off as well.

smacktoward 9y ago
There's an old saying: "you can always tell the pioneers, they're the ones with all the arrows in their back."

tanilama 9y ago

Surely won't be AR/VR though. I still cannot imagine why regular people need them besides gaming. At least with smartphone you can browse the internet anytime. What is AR/VR's killer selling point??

ebalit 9y ago
Replacing every screen you own for a start.

mbesto 9y ago

In other words - FOMO.