Back in 2018, Microsoft won a contract from the US Army to develop a mixed-reality headset to help soldiers train, rehearse, and fight. The US Army's IVAS (Integrated Visual Augmentation System) headset, developed by Microsoft, utilizes technology that was originally created for the now discontinued HoloLens. This project has gone through many ups and downs since the beginning.
Recently, Bloomberg reported that the US Army has ordered Microsoft to bring down the cost of the IVAS headset to further increase production. At the annual Association of the US Army conference, Army acquisition chief Doug Bush mentioned that the current version of IVAS under development "is going much better than the first time around," as "many of the problems have been fixed." However, he mentioned that it is important to make the headset affordable.
The US government has set a pricing goal of "substantially less than $80,000" for Microsoft. Right now, the basic heads-up display, battery, and chest unit for displaying information cost around $41,824 of the current unit price estimate. The rest of the price includes increased expenditures, from Army program management to Microsoft engineering and software support costs.
Microsoft is already working to reduce the cost to satisfy the US Army's request. Robin Seiler, Microsoft's corporate vice president for Mixed Reality, said:
"It's a fairly complex system, so when you look at cost reduction, you have to look at it from a component level, from a labor level, and from your supply chain," Seiler said. "Some of the cost projections are related to initial production batches, and other projections are based 'over time.'"
If the IVAS system passes US Army tests in the middle of next year, it could order around 121,000 headsets. Microsoft could generate maximum revenue of over $21.9 billion.
Last month, Anduril Industries announced a new partnership with Microsoft to improve the IVAS program. Anduril Industries is a defense technology startup working on bringing advanced technology solutions to US and allied military capabilities. Microsoft's partnership with Anduril Industries may be key to overcoming remaining hurdles and unlocking IVAS's full potential.
Source: Bloomberg
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