Microsoft Just Lost the Augmented Reality Wave (Premium)

Apple’s long-anticipated move into Augmented Reality (AR) has delivered a decisive death blow to HoloLens and the Windows Mixed Reality platform. It’s over, folks.

And that is too bad on a number of levels. The biggest being that Microsoft was on the forefront of this breakthrough and moved quickly to push a research project out the door in order to reestablish itself as an innovator. But the firm has also bungled its AR product offerings from the beginning, forever squandering its first-mover advantages.

Even Microsoft’s most ardent supporters won’t be able to argue this point: HoloLens, as originally conceived, is an inexplicably expensive standalone device with limited battery and processing power, a new platform that cannot leverage Microsoft’s successes with Windows on the PC. What HoloLens should have been is half the cost, and tethered to the expensive PC that developers already own. Because, after all, you’re not walking out into the world with it anyway. You are, in fact, tethered. To a location. Typically a special room.

Creating a platform from this standalone device was smart, of course, even given that first mistake. But Windows Mixed Reality, as this platform is now called, does not bring HoloLens to the PC. It brings virtual reality (VR) to the PC, and the coming headsets that device makers will create will include a single innovation that debuted first on HoloLens: The ability to “sense” the room around the user without requiring additional hardware sensors. That’s a step forward for sure. But it’s also not going to move the needle on VR adoption on the PC.

But these issues pale in comparison to one simple truth: AR makes the most sense is out in the real world. And other companies, like Google and Apple, already make the popular mobile platforms found in our smartphones … that we take out into the real world every day. So they are able to leverage this success to drive AR adoption and usage. And do so in a way that will be more desirable to actual users.

Google was first out of the gate with something called Project Tango. But like Microsoft, they bungled the delivery of this technology: Project Tango requires special hardware, and so device makers need to specifically design phones for this purpose. The first such device, the Lenovo Phab 2 Pro, has not sold well. (Google doesn’t even add Tango capabilities to its own phones, which is rather astonishing as well.)

Apple, meanwhile, has been hinting about its AR ambitions for the past year. And while the notion of Apple suddenly dominating a market that was pioneered by others seems a bit far-fetched, it shouldn’t. Because, as the company pointed out this week during its WWDC keynote, Apple has a key advantage over Microsoft, Google, and other AR wannabes.

“When you bring the software together with these devices, we actually have hundreds of millions of iPhones and iPads that are going to be capable of AR,” Apple’s affable Craig Federighi said during his presentation Monday. “And that’s going to make, overnight, [Apple’s AR platform] the largest AR platform in the world.”

Yep. He’s right.

With AR, Google can’t use its standard strategy of overcoming Android fragmentation by making Tango an app. Though even if that were possible, the firm would still face the issue of reaching potential customers and convincing them to try this functionality.

Apple, meanwhile, has a built-in audience of eager fans who will try anything and everything they find on their iPhones and iPads after they all upgrade quickly and easily—and for free—to iOS 11 this fall. Yes, they’re like an infestation of lemmings heading to the sea for sure. But they’re also a sizable and engaged audience that already own AR-capable devices that these use every single day. And that is the only thing developers care about. Cue the obvious discussion about virtuous cycles.

So what does Microsoft have? An expensive vertical solution called HoloLens. And a VR platform for PCs that’s been tarted up to look like something it isn’t. Neither addresses big, engaged, or forward-leaning audiences. Neither stands a chance.

Sorry.

This also raises the ugly specter of Microsoft doing a three-peat on “missing the next wave” of personal computing. They failed at smartphones, and now they’re failing at AR and, I think, at ambient computing, in the sense that Cortana appliances are happening too slowly to ever make inroads against Amazon Alexa, Google Home, or Apple Siri.

Now you know why I’m so freaked out these days. These events, combined with other issues with Windows 10, Xbox One, Surface, and other Microsoft personal computing offerings has me very worried about the future. Not Microsoft’s. Ours.