At the end of this year, Microsoft signed the largest ever commercial contract with the U.S. army for the supply of the helmet augmented reality HoloLens. We are talking about the supply of 100 000 set, and the development of specialized software FOR the needs of the military. The transaction amount is $480 million, which is unprecedented in the industry and exceeds all known to date commercial projects.

Back to basics

Although the device of augmented and virtual reality (AR and VR) may seem like toys, but their appearance is largely due to investment from the military-industrial complex. The army was behind the emergence of many modern technologies, including computer vision, drones, VR and mixed reality, and more. Private business for years, just could not match the investment in research and development with the military of different countries.

The most simple and clear example is the establishment of the first mechanical flight simulator, are actively developing since the Second world war, and which can be considered the precursors of modern virtual reality systems. Training air force pilots on real hardware — a very expensive task with the cost of the aircraft, worth millions of dollars, and almost one hundred percent mortality in case of an error of piloting.

A famous example of the application of mixed reality and computer vision in military technology — the holographic interface of the target acquisition and missile guidance in use today in all modern combat fighters. This system consists of several components — a helmet-mounted display system and a multifunctional (Head-Up or HUD) of the display, which displays all the information about the goal. Another example is the training of practical shooting and tactics of the assault fortified objects depicted through visual media. Compactness and autonomy of modern devices mixed reality leaves much to be desired, and most of the projects are classified, that is why the most beautiful scenarios of the use of technology, it is not always realistic, rather we see in Hollywood films (AR-lense in Mission Impossible).

Judging by the exhibition “Army-2018”, the technology of mixed reality and are actively used in the Russian army, like a special forces training tactics in urban combat and to assist military technicians in the repair of complicated equipment.

Virtual announcement

In an open tender for equipment delivery was attended by a variety of companies, including its main competitor, Microsoft HoloLens, Magic Leap product Magic Leap One. Despite the fact that the competitors product is newer by at least 4 years and a number of functional features exceeds HoloLens, the military gave preference to the Microsoft product. Why?

Although headset HoloLens was announced in early 2015, the R & d process in Microsoft didn’t stop. The second version of the product, according to unofficial sources, did not go to series, and the third is in active development. It is possible that for the last 4 years Microsoft has made substantial progress in the development and the new generation surpasses the HoloLens, Magic Leap One on a number of parameters, and the military, demonstrated the prototype of a new generation, in whose favor they made a choice.

Around the HoloLens a new generation, a lot of rumors, but publicly it has not yet been submitted. The market expected a demonstration of HoloLens at the end of the year, but no announcements followed and most of the reason in the field of mixed reality drew off the Magic Leap.

The production of high-tech products is a challenging and expensive task. Even such big company as Microsoft in the first stages of sales limited the supply of the headset, Microsoft HoloLens. For smartphones or tablets easier to calculate the cost of production and to organize the purchase of components in the quantities needed for mass production. Experts believe that devices like the Microsoft HoloLens and Magic Leap One sold at a price below cost to attract more users in the future ecosystem.

Currently sold a little over 50,000 HoloLens first version, and the version of the device for developers over at Microsoft Store many months ago. Thus, the procurement contract with the U.S. army at least twice the market volume for the entire lifetime of the product.

Perhaps this is why a new generation of devices was not announced. Fresh contract with the U.S. army fully fetches the current production capacity and the mass market is simply nothing to ship. Of course, this is only a hypothesis based on the analysis of the market situation and the absence of rapid growth in demand for mixed reality headset, which all have been waiting for many years.

The future of mixed reality helmets

Today the market of devices of mixed reality, in addition to the above two obvious favorites, represented by a fairly large number of niche players. In most cases nichebot (as opposed to universality) requires a focus on applicability in specific industries or scenarios, forcing manufacturers to adapt the product to a series of specific customers.

For many years, analysts predict a huge market potential with exponential growth in the demand for products and solutions in the field of mixed reality. Unfortunately, in practice, we got at best a linear growth of the market, and the demand fell.

In these difficult conditions, the main hope for the development of ecosystem confer on key players such as Microsoft, Facebook, Google and Apple — companies that can afford to invest in the future. The market will change substantially only when the mass segment not only want to consume the new content format, but also can afford to buy for him a mixed reality headset, which must be not only affordable, but also on the market in the proper amount.

Unfortunately, while everyone, according to tradition, rests on the lack of content and prices on the devices themselves, although a few years ago the technology seemed to be fantastic.

The cycle is closed

In the background is not yet formed massive market mixed reality, the Microsoft contract with the military looks inspiring. It is not only public promotion of research and development Microsoft, but the incentive to develop a conservative market, the effect of which we can observe in 2019.

There’s some irony in the fact that the industry mixed reality began with military applications and now, after the release of the technology to the mass market and the formation of ecosystems, the military are still the key players influencing the development of the technology. Just before the Corporation created the device for the army and now the military-industrial complex buys from corporations mass of the solution, because they were not good enough.

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