Osterhout Design Group

Osterhout Design Group
Information
Type	Private company
Industry	Augmented reality, Wearable computing
Founded	1999
Founder	Ralph Osterhout
Headquarters	San Francisco, California, United States
Notable Personnel	Ralph Osterhout (Founder and CEO)
Products	R-6, R-7, R-7HL, R-8, and R-9 smartglasses

Osterhout Design Group (ODG) was an American Augmented reality and wearable computing company based in San Francisco, California. It was founded in 1999 by inventor and designer Ralph Osterhout and built a line of see-through head-worn computers, the R-series smartglasses, aimed first at military and enterprise customers and later at consumers.

ODG is most often cited for two events. In late 2013 Microsoft paid up to 150 million US dollars for a portfolio of ODG patents covering near-eye displays and head-worn computing, intellectual property that went on to support Microsoft's HoloLens program. In December 2016 the company raised a 58 million US dollar Series A round led by 21st Century Fox, one of the largest early-stage rounds in the wearables and AR sector at the time. ODG ran out of money during 2017 and 2018, failed to complete a sale of the business, and shut down in early 2019; its patents were put up for auction in January 2019.

History

Origins and founder

ODG was established in 1999 in San Francisco as a technology incubator and product-development house. Founder Ralph Osterhout had a long career designing hardware before the company turned to augmented reality. He developed the PVS-7 night vision goggles in 1984, designed underwater propulsion vehicles and gadgets that appeared in James Bond films, and in the 1990s created consumer toys including the Yak Bak voice recorder, work that earned him a reputation as a real-world equivalent of the fictional gadget-maker Q. Before focusing on AR glasses, ODG worked on handheld biometric computers, small unmanned aerial vehicles, and portable servers, and it began developing rugged head-worn displays around 2008. Much of the early demand came from government and defense customers, where ODG's see-through goggles overlaid sensor data for soldiers.

Microsoft patent sale

In late 2013 ODG sold a block of its wearable computing intellectual property to Microsoft. TechCrunch reported the price as up to 150 million US dollars and described the portfolio as more than 81 patents, six already issued and at least 75 pending in the United States and abroad, covering see-through near-eye display glasses and related head-worn computing. The transaction closed in November 2013, with the patents transferring in January 2014, and ODG remained an independent company afterward, continuing to develop products around a separate set of patents that Microsoft did not acquire. The acquired IP is widely associated with Microsoft's later HoloLens effort.

Funding and CES 2017

ODG closed a 58 million US dollar Series A round in December 2016 with strategic investors that included 21st Century Fox, which became the company's lead investor. At CES in January 2017 the company occupied a two-story booth and announced its R-8 and R-9 smartglasses, positioning the R-8 as a consumer device and the R-9 as a higher-end developer and enterprise model. Both were promoted as among the first non-phone products built on the Qualcomm Snapdragon 835 processor.

Decline and shutdown

The company spent its funding quickly. By early 2018 ODG had lost about half of its workforce, which had peaked at roughly 100 employees, and it sought loans to keep paying staff, including an 8 million US dollar loan from a Chinese firm. The R-7 had suffered double-digit return rates tied to manufacturing problems, and the R-8 and R-9 never shipped as consumer products. ODG looked for a buyer, with reported interest from companies including Magic Leap, Facebook, Razer, and Lenovo. A deal with Magic Leap reached a signed letter of intent for about 35 million US dollars in late 2018, but Magic Leap withdrew and the sale collapsed.

With the business unable to continue, secured lender JGB Collateral hired the advisory firm Hilco Streambank to auction ODG's assets. The sale, announced on December 11, 2018, was scheduled for January 15, 2019 and covered the patent portfolio, trademarks, and remaining collateral. The materials listed roughly 107 issued patents, 16 notices of allowance, and 83 pending applications. TechCrunch reported in early 2019 that the company had effectively collapsed, and by late March 2019 ODG had suspended operations while continuing to seek a buyer for its remaining intellectual property.

Products

ODG built nine generations of head-worn devices over its history, with the publicly marketed R-series spanning enterprise and consumer models. The R-7 was an enterprise product billed as a head-worn Android tablet that let workers follow checklists, review documents, and share live video hands-free. The R-8 and R-9, announced at CES 2017, used the Qualcomm Snapdragon 835 and added inside-out positional tracking and a wider field of view, with the higher-end R-9 carrying dual 1080p OLED displays.

Model	Announced	Processor	Display	Field of view	Price	Notes
R-7	2016	Snapdragon 805	Dual 720p see-through (1280 x 720 per eye), 80 fps	Not stated	About 2,750 US dollars	Enterprise model running ReticleOS on Android; 3 GB RAM, 64 GB storage
R-8	January 2017 (CES)	Snapdragon 835	Dual 720p	Over 40 degrees, 16:9	Under 1,000 US dollars	Consumer-focused; under 4.5 ounces; 1080p stereo camera pair; never shipped as a consumer product
R-9	January 2017 (CES)	Snapdragon 835	Dual 1080p OLED, 80 Hz	Over 50 degrees, 22:9 or 16:9	About 1,800 US dollars	Developer and enterprise model; under 6.5 ounces; 13 MP camera; expansion port for add-on modules; 6DoF tracking

Technology

ODG's devices were optical see-through head-mounted displays: small projectors fed light into transparent combiner optics so that digital content appeared overlaid on the wearer's view of the real world. The R-series ran ReticleOS, an Android-based framework that ODG adapted for head-worn, see-through use. The R-8 and R-9 used Snapdragon 835 silicon and Qualcomm's VR software development kit to provide optical inside-out positional tracking, meaning the glasses tracked their own movement through space using onboard cameras rather than external sensors. The R-9 added an expansion port intended to accept aftermarket camera modules such as ultraviolet, night vision, or gesture-tracking units, reflecting ODG's roots in specialized sensing hardware.

Relevance to AR and VR

ODG was one of the earliest companies to ship self-contained, see-through AR glasses for professional use, predating better-known later devices. Its R-7 reached enterprise customers in 2016 as a standalone Android-based head-worn computer at a time when most AR systems were tethered prototypes, which placed ODG alongside contemporaries such as Microsoft HoloLens, Magic Leap, and the DAQRI Smart Glasses in the first wave of commercial AR hardware.

The company's most lasting effect on the field came through its patents rather than its products. The wearable computing IP that Microsoft bought from ODG in late 2013 is associated with the development of HoloLens, so ODG's optics and head-worn computing work fed into one of the defining AR platforms even though ODG itself did not build it. The R-8 and R-9 were also notable as early examples of putting a phone-class mobile processor, the Qualcomm Snapdragon 835, into AR glasses, a design approach that later standalone headsets and smartglasses adopted widely.

ODG's collapse is frequently referenced as a case study in the difficulty of the consumer AR business in the late 2010s. Despite a large funding round, defense and enterprise pedigree, and an extensive patent portfolio, the company could not turn its hardware into a sustainable product line, and its assets were eventually broken up and auctioned.