Apple's Acquisition of AR Startup Leap Motion Fell Through Twice, Due to 'Eccentric' Founders and Poor Management

A new article by Business Insider today takes a look into failed talks that occurred between Apple and startup Leap Motion, which the Cupertino company tried to acquire twice in less than five years. Leap Motion is a company that focuses on making advances in the fields of virtual reality, augmented reality, and hand tracking technology.

According to multiple unnamed insiders, the most recent deal was nearing completion in spring 2018 before poor management, "swirling negatives," and "eccentric behavior" of Leap Motion's young co-founders Michael Buckwald and David Holz halted the talks.

apple leap motion fails
Prior to that, in 2013 the first meeting was held between the two companies and things reportedly went very poorly after Holz -- then 24 years old -- said he had no interest in joining Apple. Sources say Holz was insulting to Apple's staff, told the company representatives that Apple was no longer innovative, its technology "sucked," and discussed the ways that Google's Android was better than iOS. During this time, Apple was said to have been mainly interested in Leap Motion's team to help work on its own AR and gesture-based projects.

Despite this poor first meeting, Apple continued to express interest in acquiring Leap Motion in the ensuing years, particularly as augmented reality and virtual reality technologies began to be more mainstream. Some of Leap Motion's original employees even left the company to work for Apple over the years, and are now helping with Apple's various AR projects, some former Leap Motion employees said.

The latest rumors point towards Apple developing AR smart glasses, which could potentially include a VR component. Apple's interest appears to lean more towards AR, since it has already backed AR as a service with the ARKit developer platform, and CEO Tim Cook often talks excitedly about the potential of AR.


Because of this, Apple made another attempt to acquire Leap Motion earlier this year, but talks fell through once again. Apple was on the verge of acquiring Leap Motion for between $30 million and $50 million in the spring, and had already started talks with the startup's human resources department and sent out offer letters to employees. As Leap Motion celebrated the upcoming acquisition, Apple pulled its offer.

Business Insider says it remains unclear why exactly Apple made this move at the last minute, but one thing appears certain: "the founders ultimately thought [Leap Motion] was more valuable than the offers on the table."

Many people close to the company say that the issues afflicting Leap Motion are a case of poor management: Much of the company's venture capital was spent on sleek office space in San Francisco's pricey SoMa neighborhood, complete with tech industry perks including beanbag chairs and daily lunches, and costly engineering salaries.

That Leap Motion should fall upon dire financial straits when the company's core technology had such great potential was described by many as a failure that could have been easily avoided.

Increasingly, it looks like Leap Motion's technology might end up bought as a hidden gem for a company looking to add its hand-tracking technology to future smartglasses products — but only if it can get the founders on board with the deal.

Now, Leap Motion is said to have new meetings lined up to explore other potential deals outside of Apple's offer, but it may be too late for the startup. According to sources familiar with the company, Apple's latest bid for Leap Motion was the AR/VR company's "last-ditch opportunity" to sell the business, which has faced financial instability for years.

Apple makes acquisitions of smaller companies like Leap Motion all the time, with news coming just in the past month of Apple acquiring Asaii and Spektral. Asaii is a music analytics platform that Apple will likely integrate into Apple Music and iTunes, while Spektral creates real-time green screens that can intelligently separate people and objects from their original backgrounds to overlay a new setting, which could be integrated into a future iPhone.

Top Rated Comments

iapplelove Avatar
51 months ago
told the company representatives that Apple was no longer innovative, its technology "sucked," and discussed the ways that Google's Android was better than iOS.
Sounds like some days here on MR lol wonder if he is a member ?
Score: 32 Votes (Like | Disagree)
cmaier Avatar
51 months ago
I see people reacting negatively to this but there is some truth to it, and it's good to see that there are people willing to tell the executives at Apple the unvarnished truth. Apple has been phoning it in for a long time now.
LOL. Just because you don’t like some of their design decisions doesn’t mean apple is the evil empire. They are the most valuable company on Earth, and clawed their way up from near ruin. When you liked what they were doing, they were probably almost out of business. Clearly they are making many millions of people happy with their products and services; far more than they made happy in the past.
Score: 16 Votes (Like | Disagree)
hipnetic Avatar
51 months ago
Yeah, those beanbag chairs are super-expensive.

And damn those "costly engineering salaries." They should just pay minimum wage to the people who make the actual products/software that make the company valuable in the first place.
Score: 12 Votes (Like | Disagree)
Soba Avatar
51 months ago
I've worked for a number of startups over the years. My key takeaways from these experiences are:

1) Founders are often extremely young, have virtually no work experience at all (let alone leadership experience), and are exceptionally poor at doing business; they know their technology and little else.

2) 99 times out of 100, the company's technology is not nearly as valuable as thought.

3) Founders are in total denial.
Score: 12 Votes (Like | Disagree)
inkswamp Avatar
51 months ago
Prior to that, in 2013 the first meeting was held between the two companies and things reportedly went very poorly after Holz -- then 24 years old -- said he had no interest in joining Apple. Sources say Holz was insulting to Apple's staff, told the company representatives that Apple was no longer innovative, its technology "sucked," and discussed the ways that Google's Android was better than iOS.
I see people reacting negatively to this but there is some truth to it, and it's good to see that there are people willing to tell the executives at Apple the unvarnished truth. Apple has been phoning it in for a long time now.

And in case we've all forgotten in the rush to denounce any tech people showing disrespect to Apple, Steve Jobs wasn't exactly cuddling up to corporate tech companies in his early days. The next Steve Jobs won't be a corporate suck-up.
Score: 12 Votes (Like | Disagree)
ApfelKuchen Avatar
51 months ago
Didn't I already see this covered in a season of Silicon Valley?
Score: 10 Votes (Like | Disagree)

Popular Stories

apple watch ultra hammer test

YouTuber Tests Apple Watch Ultra Durability With a Hammer: Table Breaks Before the Watch

Sunday September 25, 2022 2:27 pm PDT by
A YouTuber has put Apple's claims for the durability of the Apple Watch Ultra to the test by putting it up against a drop test, a jar of nails, and repeated hits with a hammer to test the sapphire crystal protecting the display. TechRax, a channel popular for testing the durability of products, first tested the Apple Watch Ultra by dropping it from around four feet high. The Apple Watch...
AirPods Max 2022 Colors

Ten Things AirPods Pro 2 Tell Us About AirPods Max 2

Saturday September 24, 2022 1:00 am PDT by
Upon the release of the second-generation AirPods Pro, the AirPods Max became the oldest current-generation AirPods product still in Apple's lineup. Introducing several new features like Adaptive Transparency and the H2 chip, the second-generation AirPods Pro may provide some of the best indications yet of what to expect from the second-generation AirPods Max. Almost two years later, rumors...
tim cook spring loaded event

Six Major Products to Expect From Apple in 2023

Sunday September 25, 2022 10:57 am PDT by
As we approach the end of a busy product release season for Apple with only new iPads and Macs left to be announced over the next month or so, we're also setting our sights on 2023. Apple is rumored to have several major products in the pipeline for next year, including new Macs, a new HomePod, a VR/AR headset, and so much more. Other than new iPhones and Apple Watches, which are expected...
Tim Cook Apple Event

Gurman: New iPads and Macs May Be Announced Through Press Releases, No October Event

Sunday September 25, 2022 6:50 am PDT by
Apple may decide to release its remaining products for 2022, which include updated iPad Pro, Mac mini, and 14-inch and 16-inch MacBook Pro models, through press releases on its website rather than a digital event, according to Bloomberg's Mark Gurman. In his latest Power On newsletter, Gurman said that Apple is currently "likely to release its remaining 2022 products via press releases,...
apple watch series 7 aluminum colors yellowbg

Don't Want the Apple Watch Ultra or Series 8? Amazon Has Record Low Prices on Series 7 Models This Week

Friday September 23, 2022 6:56 am PDT by
The Apple Watch Series 8 and Apple Watch Ultra are now available to purchase, but if you aren't interested in these updates you can save a lot of money on Series 7 models right now on Amazon. Note: MacRumors is an affiliate partner with Amazon. When you click a link and make a purchase, we may receive a small payment, which helps us keep the site running. The best deals are on cellular...
iphone 14 pro max deep purple

iPhone 15 'Ultra' Could Replace Pro Max Model Next Year

Sunday September 25, 2022 7:02 am PDT by
Apple is gearing up to possibly replace its "Pro Max" iPhone with an all-new "Ultra" iPhone 15 model next year, reliable Bloomberg journalist Mark Gurman said today. Writing in his latest Power On newsletter, Gurman said that for the iPhone 15, Apple is planning a revamped design alongside USB-C and a potential name change. Apple could replace its "Pro Max" branding, which it started to use...
AirPods Pro Second Generation 2 Pairing Feature 1

AirPods Pro 2 Engravings Appear in iOS During Pairing and Connecting

Friday September 23, 2022 9:40 am PDT by
Customers who personalize their second-generation AirPods Pro charging case with an engraving will now have that engraving reflected directly on iOS as they pair and connect their AirPods Pro. Apple allows customers to personalize their AirPods Pro charging case with a special engraving that can include select emojis and Memojis. Unlike before, starting with the second-generation AirPods...
General iOS 16 Feature Yellow

Some iOS 16 Users Continue to Face Unaddressed Bugs and Battery Drain Two Weeks After Launch

Monday September 26, 2022 7:34 am PDT by
Today marks exactly two weeks since Apple released iOS 16 to the public. Besides the personalized Lock Screen, major changes in Messages, and new features in Maps, the update has also seen its fair share of bugs, performance problems, battery drain, and more. After major iOS updates, it's normal for some users to report having issues with the new update, but such reports usually subside in...
14 vs 16 inch mbp m2 pro and max feature 1

New 14-Inch and 16-Inch MacBook Pros Reportedly Launching Later This Year

Friday September 23, 2022 7:08 am PDT by
Apple plans to release new MacBook Pro models in the fourth quarter of 2022, according to supply chain publication DigiTimes. The report does not mention specific models, but it very likely refers to the next-generation 14-inch and 16-inch MacBook Pros given that the 13-inch model was already updated earlier this year. There has been uncertainty surrounding the timing of new 14-inch and...