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 This year, when Microsoft showed off an early edition of its
HoloLens augmented-reality goggles, it took the opposite approach:
targeting the software developers it needs to make the device
useful. No stunts. No fashion spreads. No consumer marketing at all.
The discreet launch reflects the daunting hurdles confronting the
nascent industry of augmented reality, known in the industry as AR.
Such devices overlay images as holograms onto a user’s real-life
field of vision, with the goal of improving efficiency at businesses
ranging from doctors' offices to factory floors.
Some industry veterans see it as an even bigger opportunity than its
cousin, virtual reality, which completely immerses users in an
artificial world. But early efforts around augmented reality,
including Google Glass and Microsoft's own predecessor to HoloLens
called Kinect, have sputtered.
"They’re taking a more measured approach with HoloLens, and it’s the
right strategy," said Tipatat Chennavasin, general partner at the
Venture Reality Fund, which invests in augmented-reality and
virtual-reality start-ups. "You don’t want to over hype it and get
people very disappointed, and that’s what happened with Google
Glass."
The market research consultancy Digi-Capital predicts the AR
industry could be worth $90 billion annually by 2020. That's triple
the projections for total sales in virtual reality.
Google, Microsoft, Facebook and Sony are among the many tech firms
that are betting on augmented reality, virtual reality or both. The
traditional methods of interacting with a computer - usually
featuring a keyboard or a touch screen -- will eventually seem
quaint as these technologies proliferate, many in the industry
believe.
"Microsoft has a huge opportunity here, that is: to create a market
for holographic, mixed reality and to dominate it," said J.P.
Gownder, an analyst at Forrester Research. Success, he said, would
mean selling hundreds of thousands of units by the end of 2017 to
businesses.
But history suggests augmented and virtual reality still have along
way to go.
Virtual reality developers, newly energized by the release of
Facebook's Oculus headset, have focused on gaming, but no "killer
app" -- must-have software that motivates someone to buy a device --
has yet emerged. Many users still experience problems with nausea,
which plagued earlier virtual reality efforts.
Google announced last week a big virtual reality initiative, and
players in the space ranging from start-up Leap Motion to smartphone
maker HTC have generated plenty of buzz. But many of the promised
products have yet to hit the market.
Augmented reality, meanwhile, seems destined at this stage for
specialized niches in industries such as medicine and manufacturing.
Google has shifted its focus too and no longer sells Glass to
consumers, who found few useful things to do with the devices. Glass
is still available to developers.
"It took Google a long way to evolve to a more substantive
approach," said Ian Shakil, chief executive of Augmedix, a San
Francisco startup that recently raised $17 million for a smart-glass
system for doctors that automatically records patient data.
LEGACY OF KINECT
The HoloLens traces its lineage to Kinect, an add-on for Microsoft's
Xbox gaming console that was introduced in 2010. Kinect turned user
gestures into commands, and deployed sensors and cameras to map the
rooms where it was set up, creating the foundation for a more
immersive gaming experience.
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Consumers liked Kinect, but it never lived up to its full potential, in part
because it spawned no blockbuster games. Microsoft failed to persuade top gaming
studios to invest seriously in Kinect, developers say, and by 2014 it was no
longer being included with Xbox consoles.
But the Kinect technology found a second life in the HoloLens, which enables
users to control holograms through finger bends in a motion called the "air
tap." Kinect developer Alex Kipman and much of his team also led the creation of
HoloLens.
The new product, which sells in its developer version for $3,000, featured
prominently at Microsoft's recent software developers conference in San
Francisco, with participants donning goggles to take a tour of Mars led by a
hologram of astronaut Buzz Aldrin. They also played with the "air tap," which
controls a hologram's movements much as a mouse manipulates icons on a computer
screen.
But Microsoft makes it clear the playfulness takes a back seat to purpose. It
plans to "cultivate a thriving developer community and to foster a vibrant app
ecosystem," according to a company spokesperson.
Tim Gabrhel, a developer at IT consultancy Concurrency who attended the Build
conference, talked about how useful HoloLens would be for maintaining
industrial-scale printing equipment. Workers probing malfunctioning parts, he
explained, could get tailored instructions beamed onto the screen, or perhaps a
hologram of a skilled technician showing how to make repairs.
Ronald van der Putten, a software architect at Honeywell, said the HoloLens
could allow hands-free scanning in warehouses.
Brandon Haase, an engineer at Valorem Consulting, said he could see uses in
insurance: creating inventories of homeowners’ belongings by wearing a HoloLens
during a walk-through of a house, for example.
James Ashley, a software developer in Atlanta and an expert on Kinect, said
Microsoft was aiming to "fix a mistake seen with the Kinect, that the Kinect was
for gamers" only.
“They’re trying to align this new technology with their core business” of
building technology for corporations, he said.
Eventually, perhaps some time in 2017, Microsoft will likely unveil a consumer
version of HoloLens, said Gownder, the analyst.
"Over time, less expensive hardware would create a larger market," he said,
adding he expected the first consumer HoloLens to be priced under $1,500.
(Reporting by Sarah McBride; Editing by Jonathan Weber and Edward Tobin)
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