Microsoft launched its Ignite conference today by demoing the VR meetings we all wish we'd been having for the past year.
Its Mesh collaboration system, running on $3,500 HoloLens headsets, offers real-time "holographic" videoconferencing with avatars or motion-captured models. It's quite similar to a third-party offering, Spatial, which we've seen at Qualcomm and Microsoft events for the past two years. We've even seen Spatial running on HoloLens. Collaboration is definitely a killer enterprise app for mixed reality, especially in our upcoming post-COVID world, where there may be a lot less business travel and a lot more working at home.
The bigger issue is that AR/VR hardware strategies from Microsoft and everyone else seem to be stuck, and I suspect that (to their horror) only Apple will pull them out.
In a lot of ways, it reminds me of the smartphone market in 2002 to 2005, when Microsoft dominated enterprise smartphones in the US with "Pocket PC" branded devices running Windows Mobile. Smartphones existed then! I was literally hired to cover them. My first smartphone roundup, in 2004, was quite the island of misfit toys. Along with Microsoft, a handful of other platform players jockeyed for position—the equivalent of today's Valve and Oculus in VR. Then, between 2007 and 2009, a broad hardware transition (to capacitive touch screens) and network transition (to 3G) came, and it ultimately blew them all away.
(A note here: I am appalled at how many AR/VR products I have called "game changers." The game has not changed.)
3 Big Problems for Glasses
There are at least three problems that mixed reality needs to get past: hardware, network, and software. Microsoft may have software, but the hardware and network won't be there any time soon.
The hardware problem, in my mind, is mostly about displays, and the so far unacceptable trade-offs between cost and power consumption. The Oculus Quest 2 and other VR headsets have immersive, high-res, affordable displays. They're heavy, consume a lot of power, and are genuinely uncomfortable for most people to wear for more than a few minutes. People who use them tend to be people who are passionate about VR as a hobby, much like the challenge of installing an app on a 2003-era smartphone excited only geeks.
Small, super-dense displays suitable for AR exist, but they're expensive, limited, and don't seem to be getting much cheaper with time. That in turn is slowing development of AR glasses down to a drag. HoloLens 2 is a solid two years old; the first iteration is five years old. Google Glass is nine years old. Iterating industry-wide product generations every three to four years puts us maybe eight years away from the AR experience Microsoft wants to sell us.
The network piece is also letting us down right now. Qualcomm told me a while ago that AR and VR experiences, ideally, need less than about 7ms latency. That's completely impossible on 4G, which right now tethers your AR/VR to your home or office. 5G is supposed to rescue us with lower latency, higher bandwidth, and guaranteed quality of service. Those are all great elements for mixed reality, but the true reality of 5G has fallen down on every one of those points so far. It'll probably take widespread mid-band 5G to get us there, which means at least 2024-25.
Note that the network doesn't need to be in the glasses. The glasses could be a peripheral for a phone, for instance. But the network needs to exist, and it really doesn’t yet.
Enter Apple
Now we're winding up for a replay of the smartphone market. One where Microsoft does a lot of the early development, but then Apple steps in at the exact right moment, makes it mainstream, and runs away with it (at least in the US).
The right moment starts to look like Apple's rumored AR glasses launch in 2023, which I think may turn into 2024 before all is said and done. Apple's rumored launch date has floated out a few times now. It will sell no wine before its time. With the iPhone, it waited for the widespread availability of capacitive touch screens, which let it build a new, finger-friendly interface that blew up the existing smartphone world. With AR, I suspect it's waiting on displays.
Microsoft is already thinking its way out of Apple's potential hardware advantage. Mesh isn't a headset or even an app; it's a cloud platform, designed to run on a range of end-user devices. In that way, it could end up like how Office, OneDrive, and Teams interact with people on iPhones and Macs.
But of course, on Apple's hardware, Apple's services always come first, putting Microsoft in second (or third) place. The good news for Microsoft is, it has up to five years to figure out what to do about that. The bad news for all of us is, we're unlikely to see AR or VR actually change our worlds before then.