US Army Requests Reduced Pricing on Microsoft’s $80,000 IVAS Headset

In 2018, Microsoft secured a contract with the US Army to create a mixed-reality headset designed to aid soldiers in training, rehearsing, and operational combat. This headset, known as the Integrated Visual Augmentation System (IVAS), is based on technologies initially developed for the now-abandoned HoloLens project. Since its inception, the initiative has experienced numerous challenges and changes.

According to a recent Bloomberg report, the US Army has instructed Microsoft to lower the costs associated with the IVAS headset to facilitate increased production. At the yearly Association of the US Army conference, acquisition chief Doug Bush stated that the current development of IVAS “is progressing much more favorably compared to the initial phases,”noting that “many issues have been addressed.”He emphasized the necessity of making the device more affordable.

The US government has established a target price of “significantly under $80,000″for the IVAS unit. Presently, the estimated cost for the essential heads-up display, battery, and chest-mounted information display is approximately $41,824. This figure does not capture the entirety of the expenses, which also encompass Army program management and associated engineering and software support from Microsoft.

Microsoft is actively pursuing ways to lower costs to meet the Army’s expectations. Robin Seiler, the company’s corporate vice president for Mixed Reality, remarked:

“Reducing costs in a complex system necessitates a thorough examination at the component and labor levels, as well as evaluating the supply chain,”she explained. “Some of our cost estimates stem from initial production runs, while others are forecasted ‘over time.’”

If the IVAS system successfully passes the testing phase with the US Army in mid-next year, they could place an order for approximately 121,000 units. This could potentially result in revenue exceeding $21.9 billion for Microsoft.

Additionally, last month, Anduril Industries announced a collaboration with Microsoft aimed at enhancing the IVAS initiative. As a defense tech startup, Anduril is committed to advancing technological solutions for the military capabilities of the US and its allies. This partnership may prove instrumental in addressing any remaining challenges and maximizing the capabilities of the IVAS system.

Source: Bloomberg

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