Microsoft (NASDAQ:MSFT) has won a 10-year contract worth $21.88 billion U.S. to supply the American Army with HoloLens augmented reality headsets.
Over the next decade, Microsoft will provide members of the U.S. Army with 120,000 HoloLens headsets. The latest contract win comes after Microsoft fulfilled a $480-million contract to give the Army prototypes of its Integrated Visual Augmented System (IVAS) in 2018. The new deal will now provide soldiers with production versions of the headsets.
The standard-issue HoloLens, which cost $3,500 each, enables people to see holograms overlaid on an actual environment and interact using hand and voice gestures. The headsets can also show thermal imaging and allow people to see in the dark and help them aim their weapon.
Microsoft shares climbed higher after the contract win was announced. The stock rose 1.7% to $235.77 per share at the end of Wednesday’s trading session.
The billion-dollar deal demonstrates that Microsoft can generate meaningful revenue from a product that resulted from years of research, beyond core areas such as operating systems and software.
