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It’s no secret that Microsoft’s first-generation HoloLens hasn’t exactly been flying off shelves: The company acknowledged in 2015 that the $3,000 AR headset was on a multi-year journey to becoming a consumer product, and improved versions have reportedly been in the works for some time. Today, a report from Engadget suggests that Microsoft will use Qualcomm’s affordable new Snapdragon XR1 platform for HoloLens 2, a decision that could radically improve the headset’s appeal to mainstream users.

By design, the XR1 platform is a less expensive and somewhat scaled-down alternative to Qualcomm’s Snapdragon 845, custom-designed to support the less sophisticated head-tracking and processing demands of standalone mixed reality headsets. But it retains the ability to work with high-resolution displays, deliver fast augmented reality response times, and perform 3D audio.

Qualcomm is specifically positioning XR1 for what it calls “high” rather than “premium” quality mixed reality experiences, as differentiated by both price and capabilities. Depending on the quality of screen, audio, and tracking components a company chooses to pair with XR1, a headset could be available in the $400 price range, give or take. While higher than the price of a standalone Oculus Go, that price point would be in the range of the more capable Lenovo Mirage Solo and many current PC-tethered VR headsets. At the right price point, developers might actually consider creating HoloLens games.

Though Engadget’s report is very light on additional details, it claims that a “source familiar with the matter” has confirmed the XR1’s selection, and that “sources” believe that HoloLens 2 will be announced in January 2019, perhaps at CES. It also references recent reports from Thurrott.com’s Brad Sams, who claims to have seen documents describing the device code-named Sydney as “lighter, more comfortable to wear, and [having] significantly improved holographic displays” versus its predecessor, as well as costing “significantly less.”

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Despite its high-profile initial unveiling and promises of a holographic version of the hit game Minecraft, HoloLens has remained a curiosity for years. Saddled with a high price point, an extremely narrow field of view for AR content, and limited software support, the headset has seemingly seen adoption only in industrial applications. A report claimed last year that Microsoft scrapped the release of a prototype second-generation HoloLens to move on to the current, third-generation model. Meanwhile, rival Magic Leap has continued to tease its own AR offering, which includes a wearable computer and comparatively svelte glasses, and Leap Motion debuted and open-sourced an AR headset it claims can be built for $100 at scale.

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