Magic Leap has a new chief executive and it’s former Microsoft exec, Peggy Johnson
Johnson, who will begin her new role on August 1, 2020, comes to Magic Leap after a thirty-year career in the technology industry.
It’s been a tumultuous 2020 for Magic Leap. Struggling to survive amid a cash crunch and facing bankruptcy, the company laid off most of its staff in April and was casting around for a white knight investor to come in and keep the company afloat. While the Paradise, Fla.-based company found the $375 million in funding it needed, according to The New York Times, that investment came at the price of Rony Abovitz’s position as chief executive.
Abovitz, whose vision for the future of spatial computing managed to rake in over a billion dollars in funding, was a consummate hype man whose products failed to deliver on the promise they’d held.
In Johnson, Magic Leap has a proven executive who joined Microsoft in 2014 from Qualcomm as an executive hire made by chief executive Satya Nadella.
There, she ran business development and had a hand in a number of the company’s major acquisitions and partnerships including the $26.2 billion blockbuster acquisition of LinkedIn. The 58-year-old Johnson also launched Microsoft’s venture capital fund (known as M12).
At Magic Leap, Johnson will take the reins of a company whose direction has shifted to focus more on businesses than on consumers — a strategy that mirrors approaches taken both by Microsoft’s Hololens extended reality product and by early wearable tech progenitor Google Glass.
It’s also a company that managed to burn through nearly $3.5 billion under Abovitz’s stewardship and lose a valuation of
“Since its founding in 2011, Magic Leap has pioneered the field of spatial computing, and I have long admired the relentless efforts and accomplishments of this exceptional team. Magic Leap’s technological foundation is undeniable, and there is no question that has the potential to shape the future of XR and computing,” said Ms. Johnson.
Before joining Microsoft, Ms. Johnson spent 24 years at Qualcomm, where she held various leadership positions and served as a member of Qualcomm’s Executive Committee.
“As a company that has been a leader in transforming what will become the next era of computing, we have been fortunate to have a number of extremely qualified candidates express interest in the position of CEO.
However, as soon as Peggy raised her hand there was no question in my mind, or the Board’s, that she was absolutely the best person to lead this company into the future,” said Abovitz in a statement. “As Magic Leap drives towards commercializing spatial computing for enterprise, I can’t think of a better and more capable leader than Peggy Johnson to carry our mission forward.”
Oh Dip, Magic Leap's Got a New CEO
About a week after that, CEO Rony Abovitz stepped down. Now, the beleaguered startup has announced it’s found a new head honcho: Peggy Johnson.
Johnson, who currently serves as executive vice president of business development at Microsoft, will take up the mantle on August 1. Before that, she was an executive at chipmaker Qualcomm, and before that an engineer for General Electric’s military electronics division.
In an interview with the New York Times, Johnson described the move as something she chose to do, reaching out to Abovitz once news broke he was leaving. Johnson also noted that the pandemic highlighted expanded opportunities for AR as more people work remotely.
Namely, for enterprise-first applications like job training, medicine, and industrial automation. “It really says something that, at this point in time, I would leave Microsoft to go to this space, because Microsoft is doing quite well,” Johnson told the NYT.
It is a bold move, considering that AR headsets have not done particularly well since the onset of the global pandemic. Or, ever. In the past month, Bose shut down its AR division, effectively killing its audio-only Bose Frames AR sunglasses.
That was followed by news that North, a Canadian startup that’s spearheaded consumer AR glasses over the past two years, was snapped up by Google for an estimated $180 million. As part of the deal, North’s forthcoming second-generation smart glasses were also killed off.
Magic Leap itself also flopped in the consumer space. After years of hype and $2 billion in investment, the consensus was that its first headset was underwhelming. For many reasons, AR headsets haven’t quite taken off despite major advances in the technology itself.
The companies that tend to stay afloat are the ones who have shifted gears toward the enterprise space Microsoft’s HoloLens 2, Google’s Glass Enterprise 2, Epson’s Moverio, to name a few.
Magic Leap itself has also refocused its efforts toward enterprise, which does lend Johnson’s move the air of a calculated risk, rather than a straight-up Extremely Bad Idea. Still, AR and spatial computing is a nascent industry and it’s unclear if it’ll ever be tech consumers are willing to adopt.
Microsoft exec Peggy Johnson joins troubled augmented reality start-up Magic Leap as CEO
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| Peggy Johnson, executive vice president of business development at Microsoft, speaks during the Wall Street Journal D. Live global technology conference in Laguna Beach, Calif., on Oct. 17, 2017. |
Microsoft executive Peggy Johnson will join Magic Leap as CEO, the company announced Tuesday.- Magic Leap founder Rony Abovitz announced in May he would step down as CEO.
- Johnson joins the augmented reality start-up after leading Microsoft’s M&A strategy and venture fund as executive vice president of business development.
Johnson joins the augmented reality start-up after leading Microsoft’s M&A strategy and launching its venture fund as executive vice president of business development. She was hired by Microsoft CEO Satya Nadella in 2014 after a 24-year career at Qualcomm, where she worked in several roles, including running the internet services unit.
At Microsoft, Johnson was a member of the company’s senior leadership team and navigated Microsoft through major partnership deals and acquisitions, including its $26.2 billion purchase of LinkedIn in 2016.
Magic Leap’s announcement comes weeks after founder Rony Abovitz announced in May he would step down as CEO, saying “it became clear to us that a change in my role was a natural next step.”
Founded in 2011, Magic Leap was the subject of extensive hype in its early days and managed to raise about $3 billion from Alphabet’s Google and other investors. But the company’s first product, released in 2018 for over $2,000, showed lowered ambitions since the company’s early demonstrations and did not sell well.
Magic Leap recently pivoted to focus on business scenarios. During the coronavirus pandemic, Magic Leap announced in April it would lay off staff as part of a structural overhaul. The New York Times reported that about 600 of its 1,900 workers were impacted.
Johnson told the Times she was driven to take the job because she wanted to be a chief executive. Her last day at Microsoft will be Tuesday, the company said in a filing.
Microsoft will look at internal and external candidates to replace Johnson, a Microsoft spokesperson told CNBC, and in the meantime, finance chief Amy Hood will take on her direct reports.
In an email to Microsoft executives Tuesday morning, Nadella wrote, “I want to thank Peggy for her leadership and partnership these past six years. Her ability to connect people, drive consensus, and forge relationships has taught me a lot.
Through the years, she has been a clear role model for women at Microsoft and in technology, and I know she’ll continue to inspire young women in STEM in her new role.”
Magic Leap Taps Microsoft Exec Peggy Johnson as CEO of AR Venture
Johnson will start at Magic Leap effective Aug. 1, 2020, the company announced. She takes over for Magic Leap founder Rony Abovitz, who stepped down as CEO amid the company’s pivot away from consumer-oriented AR toward business applications and a wave of layoffs earlier this year.
Johnson is tasked with bringing “transformative enterprise solutions to market,” Magic Leap said in announcing her hire. The AR company has raised almost $3.5 billion to date but has found little commercial success. Magic Leap’s investors include the Kingdom of Saudi Arabia, AT&T, Alphabet (Google’s parent), NTT DoCoMo, Alibaba Group, Warner Bros., and Legendary Entertainment.
“Since its founding in 2011, Magic Leap has pioneered the field of spatial computing, and I have long admired the relentless efforts and accomplishments of this exceptional team,” Johnson said in a statement. “Magic Leap’s technological foundation is undeniable, and there is no question that has the potential to shape the future of XR and computing.”
Abovitz claimed that Magic Leap considered “a number of extremely qualified candidates” who expressed interest in the job. “However, as soon as Peggy raised her hand there was no question in my mind, or the board’s, that she was absolutely the best person to lead this company into the future,” he said in a statement.
In 2018, Magic Leap launched the Magic Leap One, a wearable device designed for developers priced starting at $2,295. The “mixed reality” system lets users see and interact with virtual objects and content, superimposed over their real-world view. In April, citing disruption caused by the coronavirus pandemic, Abovitz said Magic Leap would table its plans for a consumer version of the AR headset to concentrate on business applications.
At Microsoft, Johnson most recently was EVP of business development and was a key member of the team leading the $26.2 billion deal for LinkedIn (Microsoft’s biggest-ever acquisition). She also oversaw M12, Microsoft’s corporate venture investment fund. Prior to joining Microsoft in 2014, she spent 24 years at Qualcomm, where she held various leadership positions at the chip maker across engineering, sales, marketing, and business development.
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