This article originally appeared on Real Money on Feb. 21, 2017.

From a PR standpoint, the January 2015 unveiling of Microsoft's (MSFT) - Get ReportHoloLens augmented reality headset was timed almost perfectly. Powerful virtual reality headsets such as Facebook's (FB) - Get ReportOculus Rift were still at least a year away from seeing commercial launches, and Alphabet's (GOOGL) - Get ReportGoogle Glass was already beginning to look as if it was dead in the water. That made it easy for HoloLens, which projects holographic images onto a user's real-world view, to be hyped as a major new computing platform.

Fast-forward to today, and HoloLens, despite having made some real progress, is still only in the hands of a small number of developers and early adopters. That makes a new report about Microsoft's hardware plans for HoloLens a little concerning -- particularly given how its peers have gotten AR religion.

Tech journalist Paul Thurrott, responsible for many Microsoft scoops in the past, reports Microsoft has adjusted its HoloLens hardware roadmap to cancel the planned launch of a second-generation device. Instead, the company will focus on launching a third-gen product that provides something "closer to a generational leap" relative to the current model, but that isn't expected until 2019.

This might effectively mean that a commercial, mass-market version of HoloLens won't arrive for two years. The current model is only available through a developers kit that launched about a year ago. Developers -- the list includes Autodesk (ADSK) - Get Report, Twitter (TWTR) - Get Reportand many indie game developers, as well as Microsoft itself -- have come up with a number of intriguing productivity, entertainment and communications apps. But since the kit costs $3,000, few consumers or office workers are currently using them.

In Microsoft's defense, two years might be what's needed to fully address some of HoloLens' current hardware limitations. The current model weighs a hefty 20 ounces, offers only two to three hours of battery life under active use, and has drawn criticism for its limited field-of-view. And with the caveat that the current model undoubtedly costs far less than $3,000 to make, an extra year might also give Microsoft more time to lower manufacturing costs.

And just maybe the 2019 HoloLens will support outdoor usage. The fact the current model can only be used indoors prevents it from taking on many of the AR applications currently supported by mobile apps that leverage a phone's camera view.

On the other hand, two years gives rivals a lot of time to launch a competing product. Apple (AAPL) - Get Report, which has made multiple AR-related acquisitions and whose CEO has been making positive remarks about the technology's potential, was reported in November to be thinking about creating smart glasses that could be paired with iPhones, and show images and information in a user's field-of-view. The report added such glasses would launch in 2018 "at the earliest."

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Apple also appears to be working on supporting AR experiences directly on the iPhone's display. KGI Securities just reported that the iPhone 8's front camera will feature 3D sensing technology that can do things like detect faces and enable AR gaming applications. And the dual-lens rear camera found on the iPhone 7-Plus can produce 3D depth-mapping info that can be used by AR applications.

Meanwhile, well-funded (and well-hyped) startup Magic Leap has been working on an AR headset it promises will deliver unmatched 3D imagery with the help of proprietary silicon. However, details remain limited on the product's specs, launch date and pricing, and some recent reports haven't been too flattering.

More details are known about Intel's (INTC) - Get ReportProject Alloy, a solution for creating "merged reality" headsets that combine elements of VR and AR. Like HoloLens, Alloy doesn't need to be paired with a PC, or require external sensors or cameras. Also like HoloLens, it only works indoors for now. The first Alloy-powered headsets are expected by the end of the year.

Facebook's Oculus unit also can't be ignored. Though its hardware launches have all been VR-focused to date, it has been aggressively hiring AR talent, and Mark Zuckerberg has stressed that he considers both VR and AR to be major long-term opportunities. Facebook's long-term goal (think a decade or so from now) is to bring about a VR/AR headset that looks much like a regular pair of glasses.

And as much as Google Glass has become a punchline -- Google stopped selling a $1,500 "Explorer" edition of Glass meant for developers and early adopters in 2015 -- it's possible Google could still become a major AR player in time.

Glass taught the company a lot about building a lightweight AR headset that can be used in many environments, as well as in building a related developer ecosystem. And should Google launch a new AR headset and/or create a platform for OEMs, its ownership of Google Android, Maps and Assistant could prove quite useful.

Given the competition and Thurrott's report, there's a real risk that Microsoft is over-engineering HoloLens. Instead of developing a relatively cheap, simple and light device that could be worn outdoors and quickly see a mass-market launch, Microsoft has opted for a more powerful, cumbersome, indoor machine that's taking a lot of time to bring to consumers and businesses -- one that could potentially be a niche product used for applications such as virtual workstations and 3D modeling, rather than something embraced by the masses.

If Apple, Magic Leap and others fail to make a big splash in the AR headset market over the next two years, and if Microsoft manages to create a lighter version of HoloLens that can support more use cases, this might all be moot.

But that's assuming a lot for now.