The US Army is putting the heat on Microsoft, asking for a considerable price cut on the Integrated Visual Augmentation System (IVAS) headset, a mixed-reality device based on HoloLens that’s essential for soldier training and combat. Right now, the price tag for one unit is hovering around $80,000, which has raised concerns among military officials about the feasibility of large-scale production.
The IVAS headset is built on Microsoft’s HoloLens platform, but it’s been modified heavily for military use. While Microsoft is pulling back from developing HoloLens for the consumer market, the US Army seems determined to press forward with its own version. Even though the tech giant has dialed back on HoloLens 2 production, its IVAS deal with the Army is still alive, as both parties try to iron out issues like pricing.
Big Orders on the Line
Microsoft is under pressure, no question about it. The Army’s expectation? Bring down the cost significantly, or risk losing out on orders that could number in the hundreds of thousands. If they manage to lower the price, Microsoft stands to gain as much as $21.9 billion over the course of the contract.
But that’s only if the cost can be brought down to a more acceptable level. Right now, about $41,824 of the cost comes from the basic heads-up display and the chest unit, with additional costs piling up from things like engineering and software support.
Microsoft Steps Back from Mixed Reality to Focus on AI
Not long ago, Microsoft scaled down its efforts in mixed reality, choosing instead to pour resources into AI and cloud computing. The decision came after internal problems and lower-than-expected sales of HoloLens 2, leading the company to halt production. With Microsoft refocusing on AI, questions have been raised about its long-term commitment to IVAS and augmented reality tech for the military.
To make sure the program moves forward, the Army has enlisted Anduril Industries, a defense startup founded by Oculus VR creator Palmer Luckey. Anduril has been tapped to help refine the headset and ensure it meets the Army’s requirements, with plans to integrate Anduril’s Lattice software into the system. The collaboration could help Microsoft meet the Army’s demands as it struggles with both cost reductions and technical issues.
A Future with Augmented Reality?
The Army’s involvement in augmented reality tech goes back to 2018 when Microsoft signed a deal to develop the IVAS. The idea was to give soldiers access to night vision, thermal imaging, and real-time data overlays in one streamlined device. Despite numerous setbacks and challenges, the Army hasn’t abandoned the project. With testing set to continue in 2025, the IVAS program is still on track, but it’s unclear if Microsoft can lower the price enough to keep the military satisfied.
Next year will be crucial for Microsoft. Soldiers from the 101st Airborne Division at Fort Campbell, Kentucky, are set to put the IVAS 1.2 through extensive testing. The Army expects these trials to confirm the system’s readiness for combat. However, one more hurdle remains: cost. If Microsoft can’t bring the price down, full-scale production could be at risk, no matter how well the system performs in the field.
Last Updated on November 7, 2024 2:24 pm CET
