HoloLens 2 infiltrates enterprise, but does it have a real consumer future?

HoloLens 2 aces the enterprise, but what does it mean for you?

HoloLens (Image credit: Windows Central)

Microsoft always has a lot of projects in the works, but one of the most fascinating to watch over the last several years has been the company's efforts with HoloLens. And with the reveal of HoloLens 2 at Mobile World Congress 2019 this week, Microsoft upped the ante by improving upon nearly every aspect of the original.

Still, despite its impressive capabilities and an increasingly clear vision, HoloLens's decidedly enterprise focus can make it hard to zero in on just why the average Jane should care about what Microsoft is doing with augmented reality (AR) in the short term. Taking a longer view, however, we're starting to see some hints of how Microsoft's work on HoloLens could filter down to the consumer space, though the company clearly has a long road ahead if that's ever going to happen.

Aces in enterprise

When HoloLens first got its surprise reveal in early 2015, it felt like a futuristic tech demo. But while Microsoft was clearly feeling out potential applications for AR, it had its sights set on business customers very early. Alex Kipman, Technical Fellow for Cloud and AI at Microsoft and the company's HoloLens chief, acknowledged as much early on, noting that the general public just wouldn't have much to do HoloLens at that point. "If a consumer bought it today, they would have 12 things to do with it," Kipman told Recode in early 2016. "And they would say 'Cool, I bought a $3,000 product that I can do 12 things with and now it is collecting dust.'"

If the original HoloLens experimented in enterprise, HoloLens 2 stakes its claim with vigor.

That enterprise focus only grew in the following years, with HoloLens showing promise across a variety of industries. Ford, for example, has started leveraging HoloLens in its design process, while everyone from elevator service companies to surgeons have started experimenting with the headset's AR capabilities.

Using the original HoloLens as a testbed, Microsoft seems to have taken the feedback from its business partners to heart and doubled down on making HoloLens 2 a first-rate experience for workers, whether it be in the field, studio, or operating room.

HoloLens 2's technical improvements, like eye-tracking, an increased field of view, and better hand recognition, are all critical ways to address barriers in the way of getting work done. Similarly, the headset was also redesigned with comfort as one of its top priorities, adding more padding, better weight distribution, and a visor that can be flipped up.

Microsoft is also embracing the varied needs of its business customers with the HoloLens Customization Program. Through the program, third-party companies can make custom headsets for different industries using HoloLens 2 as a base. Imagine HoloLens 2s merged with hard hats for construction workers or medical-grade versions for hospitals. Roz Buick, a vice president with Trimble Buildings, a construction company and Microsoft partner, showed off a customized HoloLens 2 during Microsoft's MWC event. "For many of our customers, mixed reality is no longer futuristic technology nor a gimmick," Buick said at MWC. "It's real working technology that's adding value in the field every day."

If the original HoloLens was simply experimenting with the enterprise, HoloLens 2 is staking its claim with vigor. With the modifications made on the technical side, combined with Microsoft's dedication to making it an open platform for companies to build upon — through hardware or software — there's no denying Microsoft is going all-in on making AR a reality in the enterprise with HoloLens at the center.

Moving beyond business

HoloLens 2 Epic Games

Epic-Games (Image credit: Epic Games)

Even with Microsoft making its business intentions exceedingly clear, its HoloLens 2 announcement included some hints at a consumer future.

Most notably, Epic Games' Tim Sweeney, who has been a notable critic of Microsoft in the past, appeared on stage to reveal Unreal Engine 4 support is coming to HoloLens 2. Sweeney was quick to note that Epic doesn't currently have any games in the works for HoloLens, but he said the company will "support HoloLens in all our endeavors" in the coming years. If Microsoft is going to make a consumer play, having the backing of one of the most popular game engines will give it a big leg up out of the gate.

Mozilla also announced that it will support HoloLens with its Firefox Reality browser. Firefox Reality originally launched in 2018 with the goal of bringing an open and accessible web browser to VR. Mozilla is working closely with Microsoft in its efforts. "Building on Microsoft's years of experience with the current HoloLens, we will work together to learn from developers and users about bringing AR content to the web," the company said in its announcement.

Both Epic Games and Mozilla announced consumer-related HoloLens news.

Whatever its plans, Microsoft has quite a tough road to the consumer market, however, according to J.P. Gownder, Vice President and Principal Analyst with research firm Forrester, who focuses on technologies like VR and AR. "Entering the consumer market is fraught with peril," Gownder told us. "It requires social engineering in addition to technical engineering."

Gownder said Google Glass alienated many people for being expensive and for potential privacy concerns. "HoloLens would have to contend with those problems and more," he said. "Its sensors are constantly scanning the environment, so privacy would be a big issue. Perhaps more importantly, the technology isn't small enough or fashionable enough for consumer use."

Additionally, Microsoft has also found itself contending with some ethical quandaries over one of its HoloLens applications. Just ahead of the HoloLens 2 reveal (the timing of which was likely no coincidence), a group of Microsoft employees penned an open letter calling on the company to demanding that it kill a $480 million contract with the U.S. Army. Under the contract, Microsoft could wind up providing more than 100,000 HoloLens headsets to the Army to "increase lethality by enhancing the ability to detect, decide, and engage before the enemy."

Separate from the design and social challenges, Gownder also points to Apple's ARKit and Google's ARCore platforms as "potential pitfalls" for Microsoft in the consumer market. And while Microsoft is clearly in the lead with an actual product already commanding attention in the enterprise, Gownder said the potential success of consumer smart glasses from Apple, for example, could wind up threatening that lead as well. "By focusing so strongly on enterprise, there is a possibility that Microsoft will miss out on a consumer play in two ways: leaving money on the table if a consumer market develops and; the fear that consumerization would come back to fight them in the enterprise." If Apple smart glasses become popular a few years down the road, for example, and they find their way into the enterprise, they could have a wider user base and become more attractive than HoloLens, Gownder says.

When reached for comment, a Microsoft spokesperson told us that mixed reality is proving to be a success in the enterprise segment, and the company will continue to "focus on providing leading edge technology and solutions for our customers." Going forward, the spokesperson would only say that Microsoft is on a "multi-year journey" with HoloLens, and its focus remains on its commercial partners and customers.

A long road to consumer success

HoloLens 2

HoloLens 2 with phone (Image credit: Windows Central)

Many of the innovations Microsoft is cooking up for its HoloLens enterprise efforts will also have the benefit of enhancing the experience for any consumer plays in the future. Just to take one example, the advancements made for hand tracking, which succeed in making interacting with virtual models feel more natural, are important steps toward making a product that anyone can just pick up and use. And if you're venturing into the consumer market, ease of use is one of the biggest factors for success.

There are still enough hurdles in the way of a full-fledged, standalone consumer HoloLens (not the least of which is price) that it's likely a long ways away, if it ever makes it to the consumer world at all. But that doesn't mean the tech Microsoft is working on for HoloLens won't filter down to consumer products in bits and pieces; Windows Mixed Reality, for example, clearly has its roots in HoloLens despite its VR focus. And well-known brands like Samsung (opens in new tab) and Lenovo offer exciting consumer-focused WMR headsets (opens in new tab) today.

Still, it would be wise to keep your eyes on HoloLens. As Microsoft continues to expand its features and partnerships, we'll likely get more glimpses into what a consumer future may hold for the AR headset.

March 1, 2018 at 3:48 p.m.: Updated with comments from a Microsoft spokesperson.

Dan Thorp-Lancaster is the former Editor-in-Chief of Windows Central. He began working with Windows Central, Android Central, and iMore as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl

34 Comments
  • Hololens looks to be taking the same path as many major technologies. Computers and "smartphones" were staples in business for years before they found their way into the home. Businesses have deeper pockets to fund these earlier research and development periods needed to make the product more consumer friendly.
  • Definitely agree here. AR is definitely going to make strides in more consumer-oriented applications in the coming years. The biggest barrier here, imo, is going to be price, which always takes time to come down. The only question is able to establish a foothold first? And how many different players will the market support? We often forget about the social considerations when talking tech, too. I'm aligned with Gownder's school of thought here, in that privacy concerns and fashion concerns will play a big role.
  • The history you cite is maybe more of an warning than anything else, at least when it come to smartphones. Microsoft, Nokia and Blackberry dominated the smartphone market thru their reach in the business segments. Then first Apple's iPhone and later android phones come for consumers. For PC it was more like you mentioned, first business than consumers. You never know and the history will not teach us anything on how to handle this for the future as the market and the ecosystems have changed in major ways from the early days of PC and smartphones. My guess is that Microsoft needs to start out with the business as they do now but pretty soon needs to enter some kind of consumer market not to risk losing it to either a Apple product grounded in apples ecosystem or cheap Chinese android versions flooding the market and giving it a sour start.
  • It's going to be a long journey (read: 15 years at a minimum) for full mass market appeal, but it's an exciting one. I don't believe that like Kipman says AR will replace cell phones. But it might replace traditional TVs and displays. For that to happen, though, it needs to have a much longer battery life. It needs to be enough to get over a day. Charge it at night, just like cell phones today. To reach that goal it might be a smart idea to make a separate device that uses your existing cell phone as the energy and compute source and limits the headset to sensors and displaying AR. Needs to be wireless, of course. But really this goal can't be reached unless batteries make the next big step.
  • Definitely, power is the biggest roadblock to all future tech. The more power something is, the more juice it will require. And nobody has made a significant advance in battery tech in years.
  • You mean charge it until it's between 20% and 85% because if you are charging it overnight it will damage the battery 😂
  • Devices are designed so that you don't have to worry about that. They only use 20-85% of their capacity by design. When it tells you 100%, it is actually only ~85% for the reasons you mention. I hope you aren't only charging your phone to only 85% for this reason!
  • At this point, I see other OEMs as being the ones to fill the consumer gap in what HoloLens does. I just have no confidence whatsoever that MS thinks it's worth their time to do more in the consumer arena.
  • I don't think a consumer play is outside of the realm of possibility for MS, but you're definitely right in that future iterations could be a partner play. We can see that today with Windows Mixed Reality headsets. I could see a point at which a "consumer HoloLens" would be a top tier device that may not gain a ton of market share, but serves as an example of what such a device could be for other manufacturers to follow (sort of how Microsoft sees Surface).
  • That's definitely possible. One can already see the potential here from the HoloLens customization program they have. It's basically agreeing with MS to create a custom built HoloLens that 3rd party companies can sell (e.g. Trimble in this case). I could see a possible future where OEMs can leverage a cheaper version of that program to create custom HoloLens's for different types of consumer niches and maybe a general design reference from MS themselves for a more generic design that OEMs can also use like how it's done for WMR VR headsets.
  • Probably not. At least, not in it's current size.
  • By the time it does, someone else will come up with a better one and Microsoft in its own fashion will then say "we enable others to embrace new technologies", yeah and also take away that money from you too.
  • Hololens 2 tech is ready for the consumer market right now, but Hololen's cost is not. Microsoft are where they were in the 80s with PCs and Windows CE days in mobile in the mid 90s. They are early leaders in what will likely be an explosive new growth market, but there is no consumer market for a >$1000 HMD with 3 hours battery life. In the meantime, they are locking down enterprise customers & devs with basically zero competition right now. Hololens's security & manageability as a windows device + office & dynamics 365 apps + Azure services will likely make their platform extremely sticky in the commercial market when more competition eventually shows up. In PCs the platform was ready to move into the consumer space as soon as costs came down. In mobile they had >40% of the market but were forced to scrap Windows CE and start over, and we all know how that eventually turned out. Hopefully the AR market will be a repeat of the PC market for Microsoft with a solid OS, intuitive GUI & open platform ready to go when costs drop within range of consumers.
  • I like how they are talking about Apple's smart glasses when they aren't even here. Microsoft is not even close to having a product that is viable for consumers and Apple doesn't even have a product to show yet they have to be scared. They just have to take their time and when the times comes just release a product that works. Being first is not always a good thing.
  • Apple does have a product, ARKit. It is tied to an iPhone right now, but the apps being developed today will be ready when dedicated hardware is released. That is the idea at least, but I don't see much evidence it is catching on. Pokemon Go has become much better with ARKit and ARCore though.
  • There is an argument about the entertainment industrial complex overcoming the military industrial complex. IN the past, the US government would fund basic R&D to develop tech for military use. This also occurred at NASA in aviation and aerospace. Once this tech was developed it flowed down to the consumer level. But with smartphones and gaming, Apple could develop tech to convert to a product they could sell in the millions. I think the first Kinect sensor sold 5 million units a just a few months. Thus the entertainment industrial complex could invest significant money into tech and sell millions of units in a short period of time. Will Apple be able to do so before MSFT can develop hololens and migrate the tech to the consumer level? I don't know. But Hololens is a complicated piece of tech (hardware and software) that will take time to merge into everyday consumer products. I don't think the vast majority of people will be willing to wear a headset to navigate life. But maybe I am wrong and hololens and others become so small they fit on a simple set of reading glasses. Too me, the payoff at the enterprise level is significant. I also believe that gaming is the primary avenue for reaching into the consumer space. IF I am willing to pay $1000 a year to upgrade my gaming rig to be the best in class, why not pay $2K for a hololens to enjoy a better gaming experience. Also, remember the industry is moving towards a subscription-based world. While the cost of hardware is important, the profits are in the monthly subscription. Think of a person that helps redesigns kitchens. My wife has a hard time visualizing a drawing. So the designer buys the hololens, pays a monthly subscription with a company to convert drawings to a hologram that the customer can see. There are so many avenues to monetize a headset in many applications in everyday life that does not require everyone owning the headset. Will MSFT platform allow third parties to monetize their investment in the ecosystem. Seems to me MSFT is opening the system to this clear business case to many third parties. Don't they do the same in the Azure ecosystem?
  • Apple did use existing technolgy for companies (Blackberry). They did not do it very good. But marketed it to consumers very good.
  • For me, it honestly makes good sense for Microsoft to follow a business first use case with this particular product HoloLens. My issue with Nadella and company is more their overarching attitude toward consumer products. It's completely a 180 from the way Ballmer and even Gates ran the company. They've not only pivoted away from consumer, they're running away from it. The single exception I can name is gaming. But gaming isn't a mass-appeal product/service. It's very niche. What's more concerning than consumer to me though is Microsoft falling behind in education. Microsoft is losing young minds that will eventually grow up to run things, and make decisions about technology. I saw no olive branch to education with HoloLens. No education 1/2 off pricing. No announcements of software that could be used in the classroom. No Encarta for HoloLens. Bottom line... ask developers what technology company comes first to mind when I say "consumer"? What technology company comes first to mind when I say "education"? And the answer is increasingly Google. And that is a big problem. Developers who write software for consumer and education are increasingly targeting Chrome/Android/iOS... not Windows. Without a doubt Microsoft is killing it in B2B under Nadella. And arguably it's an understandable move to protect their enterprise turf, as Google and Apple try to wiggle their way into enterprise too. But the world has changed. It's not the 80's and 90's anymore. People are finding use cases for so called "personal devices" in business. We're seeing iPads and iPhones and Chromebooks and IOT devices running other OS' in the Enterprise. And should a company like Facebook make a education focused Oculus, we may very well see them wiggling their way into the enterprise Augmented Reality space next. If Microsoft can't find a way to get a toehold in consumer, and prevent the bloodloss in education they may find themselves as a SOLELY enterprise company in 2030, perhaps sooner, with hundreds of companies nipping at their heels with Android, Linux, iOS, Chrome OS based devices wiggling their way in. I don't think anyone should celebrate MS becoming the next Adobe, IBM, Oracle. Sure they'll still be alive and well... IBM is still on the Fortune 500 list... but it just won't be the "personal computing" giant it once was... and it certainly won't be a company most of us will be interested in following on sites like this.
  • Agreed. My students already are predominantly Android and ios users. MS is losing its toetold in my university in Viet Nam and its future is bleak. All because the students are comfortable with these other operating systems and applications that are available on them. Just how shortsighted is MS and its good for sfa CEO Nadella? He's winning in business in the short term but the next generation of business users will be a very hard sell.
  • I disagree. Gaming is getting more and more into mainstream.
  • For now Halolens caters to businesses and enterprise, and the technology and lessons learn funnel their way into WMR. Why is this a bad thing. Right now consumers are interested in VR, but they want a more intuitive experience, and scaling development to help cultivate and release that solution is the way to go.
  • You keep mentioning Epic Games as a hint that HoloLens for consumers is on the roadmap, but that's not why Epic was on stage at all. When moving to a spatial computing environment, you need a development framework that can take advantage of it, namely for VR and AR, we need a realistic real-time 3D rendering engine. It just so happens that another business had the same requirements since several decades, and already invested a lot in 3D engines that could be used with minor changes, video games. Since XAML is targeted at 2D windows but not spatial UIs, many companies who need 3D rendering decided to use the already tested and optimized engines that were originally developed for video games.
    This made Unity and Unreal Engine the de-facto standards for XR business applications. Markets such as architecture have already been using Unreal Engine to add virtual tours of 3D models, and are naturally using the same foundation to move to VR tours and AR-enabled workers during construction.
    Epic was on stage because Unreal Engine is used today for enterprises scenarios. Of course this means moving to consumer scenarios later is even easier, but their presence on stage for HoloLens 2 annoncement is simply because Unreal Engine on HoloLens is generating big revenues for them right now in the enterprises sector.
  • I agree. While it doesn't preclude, and certainly will make easier, future game projects, the value to Epic for Unreal on HoloLens today is exactly this.
  • Probably not a real consumer future due to the small size of the headset market. The consumer market is not large enough to make these units profitable at $300/unit. Not today anyway. The R&D and material costs to produce the devices is much higher than that. Perhaps in 10 years. For now, Microsoft will focus on customers that have money. These are typically businesses and governments. Unfortunately, when there is more than enough demand by these two, little attention will be paid to the consumer. A good example is iRobot. When demand for their government robots skyrocketed, the Roomba vacuum got ignored thus allowing competition to infiltrate the market. Now that Roomba has been spun off into its own division and government demand has slowed, they are once again able to innovate in the Roomba market. In other words, if I can profit $1000 selling to "A" or profit $50 selling to "B", I am going to focus on "A" until that market dries up.
  • Not now. Maybe in 15 years but till then maybe Google and Apple release something and they will promote it more so probably Microsoft will stay behind (possibly)
  • I can see a future Xbox being a Hololens. This can be a perfect game playing device. A visit to the Oasis anyone?
  • Nadella is not interested in the consumer side except for Xbox. MS needs someone who is focused on the consumer side to take gambles and can plot a path to success ahead of its' competition. Time for new leadership.
  • Microsoft is just establishing the AR market for Apple.
  • As a consumer, I would buy one.
  • HOLOLENS has a future if MS can clear a couple of hurdles? Must be low hurdles if MS can clear them. Just how many goals has MS kicked in the consumer marketplace since Nadella took over and he personally initiated? A round number? Please let me know of any examples because I can't think of any.
  • Microsoft is clear on that topic: the technology is not yet available for the consumer market because: 1. the price should go down to about one thousand euro / dollar to succeed, the price of an high end smartphone. 2. the fit and ergonomics should be better, as Mixed Reality will really take off with consumer when you will carry this with you everyday like you do with your smartphone today. Which means it needs to be in a form-factor that you can wear during the whole day. To make it simple: to succeed with consumer market, Mixed Reality devices will need to be able to replace your smartphone, as well as doing a lot more, for about same price as current high end smartphones. We are currently far from that but Microsoft as well as Facebook and others targets the year 2025 to expand Mixed Reality to the consumer market. The real question for me is more this one: is this vision accurate or will Augmented Reality create a new consumer market before that? Rumors says repetitively that Apple will ship AR glasses next year. Microsoft often missed the sweet spot of introducing the right technology when its mature enough to fit with the right use cases and price (Windows tablets PCs, smartphones, smartwatch...) while Apple nailed it right with the iPhone, iPad and Watch. Will Microsoft Hololens team reverse history for the first time by releasing at the exact perfect moment a Mixed Reality solution for consumer that will change the world? Looking at how Hololens and now Hololens 2 are ahead of their time and innovative I would say that they would deserve it a million time. But beware of Apple and Chinese giants like Huawei or Xiaomi which could with their billion threaten this technological adoption race by providing the right product for the right use cases for the right price. I would not be surprised if Chinese were quickly providing their own variations of Hololens with the partnership program before introducing their own technologies.
  • Mixed reality eventually will have a place with consumers. But first the prices has to come down, and weight and size has to come down. This has to happen for this tech to be practical for consumers. Even after price, size, and weight come down, I feel utilization will be niche still. The use cases will be rich for entertainment (e.g. games). For getting things done, I'm thinking driving and walking GPS navigation will be really cool. Check out the show "Memories of the Alhambra" for some examples of how navigation can work in mixed reality. That show though is about mixed reality gone really bad. But that TV. As you are doing walking navigation, it would be so cool to see additional information about stores, restaurants, etc., you are looking at. For this to become common place, there needs to be a solution for people who wear glasses.
  • I wish the author would have focused more on what will it take for the Hololens to replace the laptop or desktop computer in terms of tech like resolution etc. I think that's next big play if they can accomplish it.
  • Hopefully not. Since they're so quick to give up on consumer products. They need to be focused on building a HoloRoom. Have they taken a look at one anyone else has done in eye wear?