Microsoft was leading the world in AR; now it’s at risk of being left behind

The HoloLens headset.


Stop me if you think you’ve heard this one before: a Redmond-based software company is an early player in a brand-new market, then finds itself displaced and left behind after late-coming competitors bring to market similar products in a way that captures the mainstream audience.

We saw this with smartphones: Microsoft’s various Windows Mobile offerings built a small but loyal following, but the company was too slow to acknowledge the widespread appeal of touch-first interfaces and didn’t recognize the power of Android’s zero-cost licensing. Microsoft eventually built a good product and was even carving out double-digit market share in Europe, but it subsequently floundered, and the company has now all but disappeared from the market.

The surprise reveal of Microsoft’s HoloLens back in 2015 caught the world off guard. The product hadn’t leaked, and it offered something genuinely new: a self-contained headset that mixed 3D computer graphics with the real world, offering the kind of augmented reality experience that had hitherto been the sole preserve of science fiction. Unlike virtual reality headsets, which completely occlude your view, HoloLens lets you see the whole world in all its glory, obscuring only those parts that were hidden behind virtual objects. It borrowed from work done with Kinect, containing complex systems for mapping and tracking the room and objects around you. The setup enabled full, untethered operation without needing any base stations or object markers. As a melding of the virtual and the real, the HoloLens was thoroughly convincing.

But is Microsoft going to be able to turn this leadership in innovation into leadership in market share? That’s where things look challenging.

Based on what it has learned from HoloLens, Microsoft has built what it calls the Windows Mixed Reality platform. “Mixed Reality” is important here; Microsoft’s platform spans a wide range of devices, from vision-occluding…

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