Microsoft Flips Script on Headsets

TOKYO—When Japan Airlines Co. sent Takashi Wada to Microsoft Corp.'s headquarters two years ago to try its HoloLens augmented-reality headset, the pilot grudgingly wondered why he needed to travel nearly 5,000 miles to Redmond, Wash., to examine a gadget seemingly built for video gamers.


Microsoft believes its HoloLens augmented-reality headset will find a niche with corporate trainers, designers and repair technicians.  

 Today, Mr. Wada guides HoloLens-wearing trainees as they flip holographic switches as if they were sitting in a cockpit. His conversion explains why Microsoft believes its headset initially will find a niche not with zombie-hunting gamers but with corporate trainers, designers and repair technicians.
 Microsoft's bid for commanding position in the budding market for augmented and virtual reality is critical, analysts say, as the devices usher in new ways for people to interact with software through gestures, voice and even the direction they gaze. Apple Inc., Alphabet Inc., Facebook Inc. and others also are racing to define what could emerge as the next major computing interface.
 "I have no doubt in my mind that this is the future," said Alex Kipman, a top executive on Microsoft's HoloLens team.
 Last year, U.S. businesses used about 400,000 "smart glasses," according to Forrester Research Inc., including eyewear with tiny screens such as Alphabet's Google Glass and devices such as HoloLens, which overlays holographic elements on a person's view of the real world. Forrester expects the number to climb to 6.4 million by 2020 and 14.4 million by 2025.
 Microsoft has been an early mover before, such as in smartphone software, only to see rivals swoop in and dominate.
 While Google Glass initially sputtered, Alphabet released a version for corporate customers in July, counting Deutsche Post AG's DHL among its adopters. In June, Apple released software to help developers build augmented-reality applications on its platform.
 The market for head mounted displays includes augmentedreality devices such as HoloLens, and virtual-reality gear such as Facebook's Oculus Rift that occludes a person's vision, immersing them in digitally generated sights and sounds.
 That Microsoft came to steer HoloLens to the workplace runs counter to how technology often evolves. Consumers brought iPhones to work, for example, often forcing employers to allow corporate-email use on personal devices.
 HoloLens emerged from an engineering team working on what is arguably Microsoft's most consumer-focused business— its Xbox game division. But the market for higher-end virtual-reality devices, steered heavily toward gamers, has been slow to develop.
 "You have to pay attention to signals," said Microsoft's Mr. Kipman. Businesses expressed early enthusiasm for HoloLens, he said, but acknowledged "it's still too expensive" for consumers.
 HoloLens costs $3,000 to $5,000 apiece. Japan Airlines says the device makes up for the cost by helping it more efficiently use its flight simulators, which run roughly $880 an hour to use. The airline acquired 10 HoloLens units and may add more, in part because would-be pilots who train first with the headset end up being much more productive in the simulator, said Mr. Wada.


BY JAY GREENE

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