What do you mean? This problem has already been solved and is just a case of miniturisation which history has shown the industry can do very quickly.
5 Years and there will not be a 'headset' on sale anymore. It will all be normal sized glasses.
There are several gaps in capability between headsets and glasses, which cannot be filled by any existing technology.
For example, consider field of view, which is a critical measurement of these displays. Typical specs are 120 degrees for headsets, 40 for glasses.
Headsets also perform very high performance rendering compared to glasses. The tiny <1Wh batteries in glasses are insufficient for that amount of work.
Glasses can't be expected to compete with headsets, much less eliminate them from the market entirely within a few years. It makes more sense to think of VR headsets and AR glasses as completely unrelated product categories.
All of that will be solved by miniturisation and advancement of tech.
I think you are short sighted (haha!) to think that headsets and glasses are different categories, and that headsets are not just a preliminary research phase to things in the future like smart contact lenses etc.
Let's not hand-wave field of view. Glasses cannot display anything outside the bounds of their frames, and therefore cannot have a field of view as large as a headset. No amount of miniaturization will overcome that limitation.
Contact lenses having the capability of a headset? That's just magical thinking.
Can you be specific? You think they can't cram in enough cameras and a lidar? The see through display is the elephant in the room and it's actually progressing.
Um, okay. Specifically, glasses don't try to do any kind of gaze tracking, gesture recognition, spacial awareness, any kind of 3d, depth, or immersion.
You could add more cameras and lidar for depth, yes, but then you'd also need a display for the other eye, and you still wouldn't be able to do immersion because your displays are transparent and have a tiny FOV, and you're also not doing passthrough, so why do you need the cameras again? And so on.
The XReal and Magic leap glasses have some of those things. Hololens had it before that. There's not a dream device yet but its clearly the north star for those and the Meta devices.
> miniturisation which history has shown the industry can do very quickly. 5 Years...
Sadly I think you are vastly overestimating the rate of progress here. Quest 2 came out 5 years ago - in those 5 years we've shrunk headset volume by about half (mostly due to pancake lenses). We'll need to find another fundamental improvement in lens technology to shrink the next 50%
Big screen beyond came out in '23. Meta has made strides with their recent showings. And I don't believe anybody is really dumping vast sums of money into it quite yet, they're coasting somewhat (though I realise that that's conjecture).
I'd say the biggest unsolved issue is the focus/depth of field issue...how to provide variable per pixel depth so that virtual objects can appear in a scene and be focussed on naturally (apparently called vergence–accommodation conflict) since most if not all displays have a fixed focus distance atm.
I mean that, we are still very limited hardware and software manners. Not always for tech reasons. Sometimes patent trolls, sometimes competition, sometimes other reasons. With the amount of wealth Apple posseses if this is possible, others can't come up with better. They have the most money anyone could startup a product or project.