This is awesome progress on the best AR delivery approach we can currently conceive (short of neural implants, which are a very long ways off).
AR Contact Lenses are the right way to go because they would provide the ultimate field of view, best use of spatial resolution (no wasted pixels), best ways to track eye gaze direction (track the lenses relative to some fixed point on the head), the least geeky form factor (often no glasses required), integrate with individually corrective lenses, and probably provide the lowest power consumption of any approach. And as a bonus, they provide a natural way to turn AR into VR at any time — just close your eyes and you can be “anywhere else.”
For all the hope and hype, glasses are just a stepping stone. Alas, they’re currently 100x easier to solve (and that’s not saying they’re easy either).
In terms of challenges for these AR contact lenses, there’s the small problem of focusing the image properly. It’s non-trivial to build a lens that can sit on the cornea and also focus on the cornea. And the power issues are yet to be solved. The device will either need wireless power from nearby RF/induction or sip your body’s natural power (electric, metabolic) at suitably low levels. That’s being looked at too, but I imagine will be the last problem solved here. Less challenging is the issue of rotation and drift of the lenses w.r.t. the pupil.
One very basic thing to keep in mind is LCDs don’t actually emit any light, only filter (and usually starting at around 50% opacity). So even when perfected, these babies can only selectively reduce natural light (making the AR/VR combo above not quite feasible with this approach). That’s good enough for some applications, like text overlays, but it generally requires a bright natural environment or other backlight to work in the general case. No light = no contrast.
A clever combination of this LCD and something like OLED or edge-lit LEDs might do the trick (and also make your eyes glow). However, I have not heard of similar OLEDs that are also transparent — yet. The closest I’ve seen is a transparent OLED for cell phones, and that is probably better termed “translucent” since the pass-through is not exactly crisp and clear.
All in all, this is great progress. It makes me think 2020 is the magic date for AR contact lenses. I’d expect to see much more progress in the next 3-5 years.