With HoloLens, Microsoft aims to avoid Google's mistakes

Mon May 23, 2016 9:00am EDT
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By Sarah McBride

SAN FRANCISCO May 23 (Reuters) - When Google introduced its Google Glass smartglasses four years ago, it turned to Glass-sporting skydivers buzzing a San Francisco convention center, Glass-adorned models at a glitzy fashion show and a Twitter campaign to notify early "Glass Explorers" of their luck in snagging a pair.

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 overhype 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.   Continued...