Is Augmented Reality a Leap of Faith?

The future is here—but can it live up to the hype?

There’s a new company that’s caught my eye called Magic Leap. It’s valued at $4.5 billion, but get this: they have no products, no sales and no profits. What they do have is a handful of intriguingly flashy videos showing off the focus of their innovative efforts, a new-ish technology called augmented reality (AR).

Not unlike its close cousin virtual reality (VR), augmented reality has littered sci-fi stories for decades, but no one has been able to turn the tech into a viable product. Until now, it seems.

Magic Leap has been pretty hush-hush about the whole thing, but it looks like they’re working on a way to project 3D holographic images into real space, right in front of your eyes, which sounds very cool.

Analysts are expecting augmented reality to have much better market value than its virtual counterpart, mostly because the technology is less isolating. even predicted AR could hit $150 billion in revenue in the next five years, which means companies like Magic Leap that got a head start could start to see big, big money.

But I have my doubts.

Namely, what’s stopping this company from being the next GoPro (GPRO)? It could have a sexy product, maybe a hot IPO kick-off—but then it all falls apart once the ball actually starts rolling. I’m still not sure how management plans on monetizing this technology. If this doesn’t work, we may look back and say Magic Leap was the sign of the market top.

Alphabet/Google (GOOGL) is one of the company’s first and largest investors, but don’t forget that Google Glass bombed. Some are saying this is Google’s revenge—its way back into future tech.

Google is definitely not the only one chasing the VR/AR trend, though. Facebook (FB) dropped $2 billion to acquire Oculus VR, one of virtual reality’s frontrunners, and Microsoft’s (MSFT) augmented reality HoloLens is set to hit consumers in the first quarter of 2016.

Not even smartphones had this level of hype before actually reaching consumers, and then the iPhone came out and completely redrew the lines on the field. I think we’re all still waiting on that one product or company to take this sector by the reins and propel it to critical mass.

Right now it’s all prototypes and promotional videos—there’s a lot of flash and not enough bang.

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