Author Archives: Lucas Matney

An AR glasses pioneer collapses

In the first days of 2017, Osterhout Design Group arrived at CES with a two-story booth and huge promises. The startup’s founder, Ralph Osterhout, wanted to take the small San Francisco-based company even further past its military contractor roots in AR, building out major enterprise and consumer businesses with flashy new product lines. The company had just raised $58 million, and the Las Vegas electronics show served as its launchpad for its R-8 and R-9 augmented reality glasses lines that Osterhout hoped would bring “glasses to the masses.”

Less than a year later, however, the company had burned through its funding and couldn’t pay employees. By early 2018, ODG had lost half of its workforce as it sought loans to pay back employees. Today, a skeleton crew awaits a patent sale less than a week away after acquisitions from several large tech companies, including Facebook and Magic Leap, fell through, multiple sources tell TechCrunch.

ODG founder and CEO Ralph Osterhout

Ralph Osterhout, 73, founded ODG 20 years ago as a high-tech toy company, built after his previous venture, Machina, collapsed in what a Wired report at the time called “a spectacular bankruptcy.” After underwriting ODG with $14,000 of his own cash, Osterhout kept the startup plugging along on its own merits before he decided that it was time to reach for outside funding to turn his company into a powerhouse in the burgeoning augmented reality industry. At the end of 2016, the company raised a $58 million round led by 21st Century Fox.

ODG was already getting thousands of orders for its R-7 glasses, an enterprise-focused product that it billed as a head-worn Android tablet that could help workers go through checklists, review documents and share live video feeds hands-free. Osterhout wanted to get AR glasses into the hands of consumers and take advantage of new tech advances, even as Magic Leap was teasing the release of its own heavily hyped consumer product.

“I hope Magic Leap is a huge success. I want everyone in AR to be a huge success,” Osterhout said in an interview with TechCrunch in 2017. “[Augmented reality] is going to be transformative.”

Months later, a large Chinese firm approached ODG with an offer north of the company’s $258 million Series A valuation, a source tells TechCrunch. Talks fell through, but ODG’s leadership was at their most ambitious and felt like they couldn’t be stopped.

At the same time, following the CES 2017 product unveil, some employees wondered whether having three distinct product lines under development aimed at roughly the same customer was the right direction for the company with around 100 employees. Ralph Osterhout’s strong internal popularity kept these concerns at bay even as the company faced double-digit return rates from customers of its current-generation R-7 glasses due to manufacturing issues.

“That’s a little bit the story of ODG and Ralph, in general: everything is a prototype, nothing is finished, and before one thing is 60 percent done, you’re already onto the next one,” a former employee tells TechCrunch. “I think the heart of ODG’s downfall was its lack of focus.”

The company never ended up shipping the R-9 or the R-8 or even fulfilling all of its R-7 orders. It blew through its funding before the fall of 2017, and it wasn’t long before employees were on half-pay and soon stopped getting paid at all. ODG sought backing from Chinese firms, but sources say that a negative trade environment hampered those efforts. In 2018, it received an $8 million loan from a Chinese firm used to pay back employees as Osterhout began trying to scrounge together an exit strategy, seeking buyers for the company that bore his name.

Suitors for the company included Magic Leap, Facebook, Razer and Lenovo, sources tell TechCrunch. In each case talks fell through, as Osterhout was convinced that his company was being undervalued by the prospective acquirers.

ODG’s San Francisco offices in 2016

Sources say that Magic Leap continued to bump up its offer, eventually signing a letter of intent in the final months of 2018 to purchase the startup. The final proposed purchase price ended up at $35 million, still a far cry from its 2016 valuation, a source familiar with the deal tells TechCrunch.

This offer came with stipulations for the types of engineers Magic Leap wanted to bring aboard, leading ODG to shrink its staff to just a couple dozen employees. As the startup whittled itself down to prepare for a disappointing, yet relatively dignified, sign-off, Magic Leap began to grow cagey about finalizing the acquisition, sources say. As the deal started to fall through, some in ODG’s leadership began to wonder aloud whether Magic Leap was “acting in poor faith” and was only looking to starve the company before purchasing assets at a discount in a patent sale.

“Ralph turned around and he didn’t have a company or team anymore, and then Magic Leap goes, you know what, we’re just going to buy the IP, we don’t want the company, you don’t have a company anymore,” one source said.

Magic Leap did not respond to a request for comment.

With the deal shot and the indebted company in shambles, the team dwindled down further to a skeleton crew — essentially a deals team — as company assets were put up for sale by IP advisory firm Hilco Streambank. The company’s patent portfolio up for sale next week includes 107 issued patents and 83 pending applications.

The 20-year-old company has already seen its early work in foundational AR patents pay off. In 2014, Microsoft paid around $150 million to acquire a trove of ODG patents after deciding not to buy the company outright. In documents reviewed by TechCrunch, ODG highlights a number of AR patents in its collection on which it believes existing products from companies like Magic Leap, Google and Facebook infringe, specifically pointing to diagrams of systems like the Magic Leap One and Oculus Quest that they claim conflict with its prior art.

With a patent sale (spotted first by UploadVR), ODG’s leadership is looking to recoup enough to pay back the company’s debts, as well as the employees who worked for months on partial salaries.

Whether or not ODG’s downfall was largely a cause of mismanagement, the disparity between acquisition offers and its 2016 valuation showcases a broader cooldown in the augmented reality industry, as capital-intensive efforts in enterprise and hardware have proven to be a more difficult sell for investors heading into 2019.

Last month, Blippar, an enterprise-focused AR startup that raised more than $130 million, collapsed after failing to secure an emergency influx of cash. Just yesterday, it was reported that Meta, an AR hardware startup with $73 million in funding from Y Combinator, Tencent and Comcast, had fallen into insolvency. Magic Leap itself has had issues breaking into broader markets: In November the startup lost out to Microsoft on a $480 million military contract.

Asked whether they would pin the company’s failures on the broader industry slowdown, a former employee said, “From an internal standpoint, all I saw was, we are fucking it up.”

Ralph Osterhout did not respond to a request for comment.

Grado takes the wraps off their first pair of wireless headphones

Legacy open-backed headphone maker Grado is taking their classic design into the future with the small Brooklyn company’s first pair of wireless headphones.

The GW100s have a familiar look, but integrate Bluetooth tech and volume controls. They go for $249.

Grado headphones are a favorite of mine; they have a very unique open sound that really resonates and are perfect for home listening. Previous iterations haven’t really thrived as much on the road or in noisy offices because they tend to let in a lot of outside noise and leak a lot of your tunes. The company says that they’ve redesigned the housings and internals of the GW100s to reduce noise leakage by 60 percent — no famed wooden enclosures on this design either.

Part of what’s great about Grado headphones is their history; we toured the company’s tiny Brooklyn HQ a few years back and took a look at their operations… really cool stuff.

It’s tough for a company to make do on just brand legacy alone, and even though audio tech generally has a much longer shelf life than other products, there’s always a time to adapt, especially now as more hardware makers purge headphone jacks from their devices.

In the past few years, the company branched out into some more mobile-friendly products, but the magic wasn’t all there. The wireless GW100s keep the company’s same drivers, though it’ll be interesting to hear what they sound like as the company tunes them to be more amenable to “on-the-go” listening. Speaking of which, they also look like they have a sturdier design than some of the company’s more spartan headbands, which were strangely kind of part of the appeal, but are definitely welcome for something more likely to be chucked in a backpack.

The headphones charge via micro-USB and offer a 15-hour battery life, the company says. They also pack an included 3.5mm cable if you want to use them with your old gear. More details on precise audio tuning are listed on its product page.

Improbable brings its massive multiplayer platform to Unity game engine

As battle royale games like Fortnite pit more players against each other, studios are starting to realize the potential of bringing a massive online audience together at one time. This ambition has always existed, but Improbable, a well-funded startup aiming to enable these vast online worlds, is looking to bring these experiences to more game developers.

Improbable has announced that it is bringing a game development kit for its SpatialOS multiplayer platform to Unity, a popular game development platform used to create about half of new video games.

Improbable has some pretty grand ambitions for multi-player gaming and they’ve raised some grand venture capital to make that happen. The London startup has raised just over $600 million for their vision to enable digital worlds with vast expanses of concurrent users. The company’s SpatialOS platform allows single instances of an online game to run across multiple servers, essentially stitching a world together with each server keeping an eye on the other, allowing for hundreds of users to see each other and their in-game actions translated in a persistent way on systems across the globe.

The company’s tech opens the door for a lot of game developers to become more ambitious. There are several developers who have released titles on the platform.

Today’s news is a major step for the company, leveraging the popularity of Unity with a lot of younger studios to enable easier MMO development on an engine that is very popular with a wide range of developers. SpatialOS was previously available in a more limited, experimental scope on Unity. It also supports some development on Unreal Engine and CryEngine.

With today’s release, developers building with SpatialOS can craft games that allow for up to 200 players. The game development kit gives developers multiplayer networking and some other related features to expand the playing field, or at least further populate it. Improbable’s involvement goes far beyond just facilitating a download; a game built for SpatialOS will be hosted on Improbable’s servers, where it can be maintained via its host of web tools.

Limited Siri support for music apps like Spotify is possible in iOS 12

Apple is finally getting a bit more friendly with third party music-streaming apps when it comes to Siri.

Music-streaming companies like Spotify will soon be able to let users utilize Siri controls to play music through their apps thanks to Apple’s newly-announced Siri Shortcuts feature in iOS 12.

At a WWDC developer session, the company detailed a new “Play Media” intent it was introducing to developers with Siri Shortcuts that will let users summon audio and video media from third-party apps. The integrations would operate much less seamlessly than controls for Apple Music through Siri, but you would theoretically be able to direct Siri on the iPhone or HomePod to a designated playlist or artist on a service like Spotify, functionality that was previously not possible.

The big caveat here is that this is a developer tool and support relies on apps like Spotify and others integrating these new changes into their apps with iOS 12. In other words, don’t go bothering Siri quite yet.

What you probably won’t be able to do is ask Siri to play a specific artist or song that you haven’t already built a shortcut for. So, yeah, it’s not perfect, but it’s a start.

Developers are already playing around with how the functionality could work in the iOS 12 beta release, though without official Spotify app support things are still a bit rough.

With proper integrations the feature would launch the app in the background so you could keep your phone in your pocket while the tunes automatically started playing. At that point, Siri would also be able to handle playback controls for the app.

The “Play Media” intent boasts full HomePod support as well but you still have to set it up through the Shortcuts app on your iPhone before querying Siri on HomePod directly. The HomePod has previously only given users Siri controls to bring up songs with Apple Music.

Last week, I wrote about how Apple needed to open up its compatibility with Spotify at WWDC and while this certainly isn’t full support from the company, it is a peace offering to Spotify and other music-streaming apps which could now build functionality for users to do things like summon their playlists from Siri on the iPhone and HomePod through Siri Shortcuts.

Sonos announces the $399 Beam, its compact home theater smart speaker

Today, at a special event in San Francisco, Sonos announced a compact home theater smart speaker, the Sonos Beam.

The $399 device boasts a much smaller footprint than its previous home theater products, the company says Beam is 60 percent smaller and 28 percent shorter than the Playbase. The speaker is available for pre-order starting today.

The company’s new home theater product will support Amazon Alexa controls at launch alongside Airplay 2 connectivity which will arrive in July. The product will be set up to gain support from other voice assistants in the future, the company says. You’ll be able to perform tasks like turning on the TV and changing the device’s volume, with FireTV support you’ll be able to query Alexa to direct you to specific movies and shows.

“We believe that people want a better way to listen,” said CEO Patrick Spence onstage at the event.

The product launch is an important one for Sonos which is still seeking to expand its footprint in home audio products. In April, the Wall Street Journal reported that Sonos had filed confidentially for an IPO that could take place as early as this summer.

While the Santa Barbara company was the incumbent disruptor of the stodgy whole room audio systems of the past, deep-pocketed tech giants like Google and Apple have invested heavily in audio streaming hardware and APIs. Sonos has found itself having to compete in a home audio market that is increasingly becoming more about the embedded AI tech of virtual assistants.

Apple’s $349 HomePod is just the latest competitor to prioritize more intelligent music playback, meanwhile there are dozens of speakers with Amazon’s Alexa and the Google Assistant. Last year, Sonos added Alexa functionality to its new product, its Sonos One speaker which is also set to pick up support in July for Apple’s new Airplay 2 alongside the Playbase, Play:5 and the new Beam.

Facebook announces Oculus Connect dates Sept. 26-27

The Oculus Connect developer conference is back for its fifth year of chasing the VR dream.

Facebook VP or VR Hugo Barra announced that the company’s virtual reality-centric conference would be returning to San Jose on September 26 and 27. In past years, Oculus has used the conference to reveal its latest prototype hardware and to announce new software upgrades. This year, VR took center stage at Facebook’s F8 developer conference with the company using the event to launch the $199 Oculus Go standalone headset while also showcasing its latest prototype “Half Dome”.

It will be interesting to see what VR announcements are saved for Oculus at its own developer centric event and whether they use the opportunity to talk more about prototypes like its positionally-tracked “Santa Cruz” standalone which they have discussed the development of for the past two years.

Registration details for OC5 aren’t available yet but the application has typically gone live in mid-summer.

Apple gives users control of Siri with new Shortcuts and Suggestions tools

Siri has long been one of the most broken experiences on iOS. Apple didn’t have much to say about improvements to quality, but at WWDC the company did highlight updates to the interface making it easier for users to create their own commands and get proactive updates from Siri.

Siri suggestions allows the digital assistant to learn from user behavior. If you have a regular coffee order, Siri can suggest that you place your order around the time of day that you would usually get it. If you’re running late to a meeting, Siri may recommend that you shoot a message to someone letting them know you’re going to be a few minutes.

Shortcuts is a separate app that allows users to take control of Siri and build custom commands that integrate with third-party apps though an “add to Siri” button. With this users could jump to information about an upcoming trip by using a shortcut into the Kayak app.

Apple kind of blazed through this presentation so we’ll definitely want to see more of how this works. It’s always best to be pretty skeptical of Siri, but these updates could be exciting developments for iOS and platforms like Watch and HomePod.

Apple needs to play nice with Spotify

With WWDC a couple of days out, we’re coming up on one year since Apple first showed off its glitzy answer to the Amazon Echo and Google Home smart speakers. It took more than 8 months from then for the HomePod to finally hit shelves, and it took up until a couple of days ago for all the promised functionality to arrive.

Four months since launch, it’s clear Apple delivered some awesome hardware, but there are plenty of features I want to see the HomePod pick up when Apple comes to the stage at its annual developer conference to talk iOS 12. For all the criticisms levied against the device, the most weighty has been the fact that there isn’t even a vague reason to consider buying the speaker unless you are an Apple Music subscriber. For Apple Watch users who want to listen to non-Apple Music tunes the same is true to a lesser degree.

At the very least, the company needs to introduce some functionality to third-party music services through SiriKit that opens up voice commands to play specific songs and user playlists while leaving premium functionality for Apple Music where users can say stuff like “play more songs like this,” and “play something I’d like,” etc., etc. No one is expecting the Apple hardware to be designed around listening to Spotify, but it’s frustrating and confounding that Apple won’t play ball at all.

Apple Music has 50 million subscribers, including those on three-month free trials. Spotify has 170 million monthly active users, 75 million of which are paying for the Premium service. That’s an awfully big chunk of music fans to be ignoring. As nice as I think the HomePod is, it’s a bold (and misguided) strategy to think it’s enough to convince entrenched Spotify playlist lovers that they just need need need to switch so they can buy this $349 speaker.

To be fair, the company seems to have had enough struggles making the speaker work for its own ambitions. Airplay 2 was announced at WWDC last year and was only released a few days ago with the functionality that brings stereo playback to users that have a couple of HomePods.

iOS 12 would be an opportune time for Apple to showcase that the HomePod is open for business to third-party developers — though hopefully in a way that’s more gated than the gimmick dump that Alexa Skills has become. Siri has been pretty light on third-party action for a while now, but it made some notable strides in iOS 11, though that functionality has largely been screen-dependent and thus not available to the HomePod. It’s time to change that, or at least share how they plan to improve the experience over the next year.

Apple hardware giving preferential treatment to Apple services isn’t exactly a surprising turn for the company, but building a smart speaker that asserts fantastic audio as its central premise while ignoring any shred of support for playing songs from the most popular streaming service seems a little anti-consumer and out of Apple’s best interests, as well. It’s taken Apple long enough to bring Siri to the rough place it’s at now on the iPhone, hopefully they can speed up the progress on HomePod and Apple Watch to make life easier for third-party integrations on devices that have so much unrealized potential.

Apple needs to play nice with Spotify

With WWDC a couple of days out, we’re coming up on one year since Apple first showed off its glitzy answer to the Amazon Echo and Google Home smart speakers. It took more than 8 months from then for the HomePod to finally hit shelves, and it took up until a couple of days ago for all the promised functionality to arrive.

Four months since launch, it’s clear Apple delivered some awesome hardware, but there are plenty of features I want to see the HomePod pick up when Apple comes to the stage at its annual developer conference to talk iOS 12. For all the criticisms levied against the device, the most weighty has been the fact that there isn’t even a vague reason to consider buying the speaker unless you are an Apple Music subscriber. For Apple Watch users who want to listen to non-Apple Music tunes the same is true to a lesser degree.

At the very least, the company needs to introduce some functionality to third-party music services through SiriKit that opens up voice commands to play specific songs and user playlists while leaving premium functionality for Apple Music where users can say stuff like “play more songs like this,” and “play something I’d like,” etc., etc. No one is expecting the Apple hardware to be designed around listening to Spotify, but it’s frustrating and confounding that Apple won’t play ball at all.

Apple Music has 50 million subscribers, including those on three-month free trials. Spotify has 170 million monthly active users, 75 million of which are paying for the Premium service. That’s an awfully big chunk of music fans to be ignoring. As nice as I think the HomePod is, it’s a bold (and misguided) strategy to think it’s enough to convince entrenched Spotify playlist lovers that they just need need need to switch so they can buy this $349 speaker.

To be fair, the company seems to have had enough struggles making the speaker work for its own ambitions. Airplay 2 was announced at WWDC last year and was only released a few days ago with the functionality that brings stereo playback to users that have a couple of HomePods.

iOS 12 would be an opportune time for Apple to showcase that the HomePod is open for business to third-party developers — though hopefully in a way that’s more gated than the gimmick dump that Alexa Skills has become. Siri has been pretty light on third-party action for a while now, but it made some notable strides in iOS 11, though that functionality has largely been screen-dependent and thus not available to the HomePod. It’s time to change that, or at least share how they plan to improve the experience over the next year.

Apple hardware giving preferential treatment to Apple services isn’t exactly a surprising turn for the company, but building a smart speaker that asserts fantastic audio as its central premise while ignoring any shred of support for playing songs from the most popular streaming service seems a little anti-consumer and out of Apple’s best interests, as well. It’s taken Apple long enough to bring Siri to the rough place it’s at now on the iPhone, hopefully they can speed up the progress on HomePod and Apple Watch to make life easier for third-party integrations on devices that have so much unrealized potential.

Google builds its cross-platform multiplayer AR tech into a doodling app

At Google I/O earlier this month, the company announced Cloud Anchors, a tool that shares with the cloud 3D data captured by a user’s smartphone — and can match that data with another user to create a shared AR experience where each person’s phone is seeing the same things in the same places.

Today, Google is rolling out Cloud Anchor functionality to its AR drawing app called Just a Line, which it released a couple of months ago. Just a Line is hardly a breakout hit for Google, but the simplistic app that lets users paint the 3D world with a white line offers a nice testbed for early AR functionality that’s just as experimental.

What will likely differentiate Google’s offering from whatever Apple ends up shipping is that Cloud Anchor is cross-platform. The Just a Line app is available on both Android and iOS, and with today’s update users on both platforms will be able to collaborate and view items in a shared space.

What’s generally important about multiplayer AR experiences is making the process simple enough for users to sync their spatial map with another user so they see the same digital objects in the same physical locations. What Google has built seems a bit cumbersome, with each user needing to stand next to each other to pair their environments. It also seems that the functionality is limited to two people at the moment.

Just a Line isn’t the most high-stakes place for Google to be dropping this feature, so there is clearly room for the company to keep updating what they’ve got as they see what early usage looks like.

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