Augmented reality's time is coming thanks to smarter smartphones

Today's increasingly feature-packed smartphones are likely to propel the use of augmented reality into the mainstream in the coming years.

Augmented reality - the process of superimposing digital information or objects onto real-time video streams in order to create the illusion that they are part of the physical scene - will be pulling in revenues of more than $350m by 2014, up from $6m in 2008, according to analyst ABI Research.

Augmented reality has existed for more than 15 years but has traditionally been used in military, automotive, and entertainment applications. The revenues from such industries, however, will soon be outstripped by advertising and mobile apps sales, ABI research said.

This growth will be stoked by smartphones packing a range of high-end features - such as video cameras, GPS, compasses and accelerometers - which can be used in augmented reality apps.

ABI Research predicts the future could see the creation of global databases full of geographical information, contributed by governments, businesses and individuals. Through augmented reality, such geo-tagged data can give users information about their location such as details on notable buildings, or shop sales and other special events nearby.

However, Joe Madden, author of ABI Research's report into augmented reality, warns that other technological advances are needed before augmented reality can fully enter the mainstream.

"GPS location accuracy is not adequate currently for many applications, requiring additional techniques to refine location precision for shopping applications, or for game applications in which virtual objects must be placed precisely on the display near corresponding real objects," he said in a statement.