Jabil partners with Magic Leap

Two leading Florida companies teamed up to produce technology that they say will change the way people consume digital content.

Jabil (NYSE: JBL), a St. Petersburg-based manufacturing solutions company, is working with Magic Leap, based in South Florida, to create Magic Leap’s lightweight, wearable computer. The technology — a head-mounted digital lightfield display and portable sensing and computing device — superimposes three-dimensional images in physical space. Magic Leap calls it “spatial computing.” Many tech journals describe it as augmented reality or mixed reality.

Jabil and Magic Leap innovated and invested in new manufacturing processes and technologies that draw on artificial intelligence, machine learning, sensors and optics. The manufacturing is being done at a new facility in Guadalajara, Mexico that Jabil built specifically for Magic Leap, and where Jabil is training workers on their tasks using the Magic Leap technology.

Financial terms of the partnership were not disclosed.

Magic Leap initially launched Magic Leap One in August 2018 and showed off the technology a few months later at the Synapse Summit in January 2019. While Magic Leap One has gotten mixed reviews, the company has drawn a lot of interest from investors. The company has raised $2.6 billion and is the best-funded startup in Florida, according to CB Insights.

The company also has expanded an early emphasis on gaming to business uses for its technology, including health and wellness, mobility, energy and water, and communications, according to Fast Company.

‘Inventing things along the way’

Jabil,  a global company that is No. 140 on the Fortune 500 and is the largest business headquartered in St. Petersburg, has been focused on diversifying its markets and products. In one of its biggest diversification moves, the company last year struck a deal with Johnson & Johnson to produce medical devices. That deal is expected to bring $800 million to $1 billion in revenue to Jabil in the current fiscal year.

Kenny Wilson

Jabil gets a lot of requests to engage with new companies, said Kenny Wilson, executive vice president and CEO of Jabil Green Point, which makes consumer and mobile products for dozens of customers, including Apple.

“We are very selective,” Wilson said in an interview with the St. Pete Catalyst. “There’s a lot of people [at MagicLeap] we had worked with in the past so we had some experience with the leadership team there … And we are excited about the technology, and we think in the longer term there’s a big market here.”

Jabil and Magic Leap executives held talks in Jena, Germany, where Jabil has an optical technology group, and the companies agreed to work together after six months of back and forth discussions.

“It became clear the more we engaged with them that to launch a product like this successfully you need to have the correct suite of capabilities within the organization that can help in the development cycle and into the manufacturing cycle. The more people that are involved in the supply chain, the more complicated it is from a design perspective, the more difficult it becomes to execute it properly,” Wilson said. “We probably were uniquely positioned in the industry to help Magic Leap be successful.”

Magic Leap is tackling some tough challenges, Omar Khan, Magic Leap’s chief product officer, said in a video released by Jabil.

“We’re solving some very difficult problems here at Magic Leap and we know we can’t solve those problems alone. In order to build Magic Leap One, all of the processes and technologies haven’t existed. We’re having to invent things along the way and we couldn’t think of a better partner than Jabil to help us solve those problems,” Khan said.

Magic Leap was able to tap Jabil’s digital supply chain. “When we went to some suppliers with Jabil, it actually looked like a much larger entity. It enabled us to get better pricing and faster supply guarantees,” said Lonnie Bernardoni, Magic Leap corporate vice president, supply chain.

Jabil was able to be flexible and agile, said Jeff Farrand, business unit leader at Jabil. “We are able to support them on optical design, also test and process development, through precision mechanics and tooling.”

Jabil also was able to keep secrets. No proprietary intellectual property leaked out during development, Bernardoni said.

Scaling up

One of the most challenging parts of the collaboration was the space required to produce the technology, said Felipe Ascencio, Jabil operations manager. The calibration stations required a clearance of five meters, he said.

Jabil authorized a new building to support Magic Leap’s production demands, converting a parking lot to a full-scale operation with surface-mount technology and assembly lines, as well as optical test capabilities and stringent quality control processes.

Most of Jabil’s factories are used to produce products for several customers, Wilson said, and the Guadalajara facility could be repurposed in the future as well. “It’s a good investment for the longer term because we think the market we are going to capture will be a big one, and you have to be prepared.”

Jabil also is using Magic Leap One to train production-line operators and to support them through complex operations, in order to scale up and get products to market quickly.

“If the only way we can train our people is by putting their hands on hardware and you don’t have the hardware available, then how are you going to train people? So, we can use the headsets that we make to train the people to make more of them, or to make other products,” Wilson said. “This can be deployed seamlessly and we can do it in different languages. We can be training people in Mexico or in Europe or in Asia and we’ll get up to speed much quicker.”

Paving the way for other tech firms

The processes and technologies Magic Leap and Jabil are bringing to life haven’t previously existed, so there’s close collaboration between the two companies, Wilson said.

“If you sat in a meeting with Magic Leap and Jabil, you wouldn’t know who was a Magic Leap guy and who was a Jabil  guy,” Wilson said. “If you can take the sum of what Jabil’s best at and what the customer is best at … then  ultimately the solution is going to be better.”

The collaboration between two leading Florida companies is a promising development for the state and for technology in general, said Ken Evans, managing director of the Tampa Bay Innovation Center.

“Having a big name manufacturer work with an emerging tech company through their product journey and help optimize their manufacturing and packaging process/logistics is the type of collaboration that paves the way for other tech companies,” Evans said.

The deal sends a signal about the tech industry in Florida, according to Wilson.

“We can execute something that really is leading edge and new to the world and not coming out of [Silicon] Valley,” he said.