The virtual reality (VR) market is still in its infancy, but has the potential to become an important segment of the broader technology space, as consumer and enterprise VR will reach an estimated market size of 25 billion. dollars in less than three years.
Two companies that have a good chance of successfully tapping into this growing market are Microsoft (MSFT -0.85%) and Apple (AAPL 1.57%). These tech giants are already in their own way in VR and augmented reality (AR) and could end up benefiting from their first steps. Here’s why.
Microsoft’s headset bet
Like so many other tech companies right now, Microsoft has its own AR/VR headset. But unlike many of its peers, Microsoft’s headset, called Hololens, is already being used for real-world applications.
Industrial manufacturers and healthcare companies have used Hololens to train their employees, and so far Hololens already has 200 partner apps for the device, in addition to Microsoft’s own apps.
But the most notable use case for Hololens so far has been for the US military. Microsoft currently has a contract worth up to around $22 billion to deliver 120,000 Hololens units to the Armed Services Division, and recently sent its first shipment of 5,000 to the military.
These devices are an adapted version of Hololens called the Integrated Visual Augmentation System (IVAS), and can leverage Microsoft’s Azure cloud services to monitor and display data from specific sensors.
Of course, Microsoft isn’t just interested in deploying Hololens for the armed forces, but this initial order shows that there are practical uses for the device, and that Microsoft is already receiving potentially large contracts for its headset – which most tech companies can’t claim now.
Not only that, but if Microsoft can show how well its Azure cloud services pair with its headset, future uses of its Hololens could be a boon to the company’s already successful cloud service.
Apple’s ambitions in augmented reality
Apple has already made strides in the AR/VR space with the company’s efforts to integrate augmented reality apps into its App Store. There are already more than 14,000 AR apps running on the company’s mobile operating system – and Apple is probably just getting started.
The company is reportedly working on an AR/VR headset that it has already shown to its board. This indicates that Apple could be close to launching the device, although it’s still uncertain when it will.
Apple is particularly good at pairing software with hardware. And another indicator that it’s about to launch a headset comes as leaked source code showed the tech giant is working on what it calls RealityOS, likely a reference to an AR operating system. /VR.
If and when Apple releases its headphones, some analysts have estimated the company could generate up to $18 billion in headphone sales just five years after launch.
Some of the latest estimates put the launch of Apple’s AR/VR headset at the end of this year or next year, which means investors may not have to wait much longer to see Apple take hold. this market head-on.
Be patient with this market
Although Microsoft and Apple have a lot of potential to benefit from augmented reality and virtual reality, investors will probably have to be patient to experience it.
These segments of the tech world are just getting started, and it may be a few years before Microsoft and Apple see a direct bottom line benefit.
Chris Neiger holds positions at Apple. The Motley Fool holds posts and recommends Apple and Microsoft. The Motley Fool recommends the following options: long calls $120 in March 2023 on Apple and short calls $130 in March 2023 on Apple. The Motley Fool has a disclosure policy.