Increasing smartphone capabilities will cause augmented reality to have a booming impact on the mobile platform, according to a new study from ABI Research.

As advertisers leverage the augmented-reality platform more, ABI found that the technology is poised to grow from generating $6 million in revenue in 2008 to $350 million in 2014. ABI credits advanced smartphone capabilities such as video cameras, GPS data and compasses as key to unlocking the power of augmented-reality advertising.

?The key finding is that the augmented reality market will diversify into multiple markets, which will generate nearly $190 million in mobile applications, games and customized augmented-reality revenue, and nearly $170 million in mobile augmented-reality advertising revenue, by 2014,? said Larry Fisher, research director of NextGen at ABI Research, Oyster Bay, New York.

Augmented reality is the overlay of graphics onto a video stream or other real-time display.

ABI Research provides analysis and forecasting of emerging worldwide trends.

The study, ?Augmented Reality: Adding Information to Our View of the World,? found that advertisers will learn to insert tags into navigation displays to increase revenue.

ABI cites Apple?s iPhone and Google?s Android handsets as examples of smartphones opening up augmented reality to the mass marketplace.

While some smartphones have the technology already, the study cautioned that many technological advances are still required for augmented-reality applications to take over the marketplace.

A key, according to the study, is developing accurate GPS location services for all phones because of the need for augmented reality to place virtual objects on display near other corresponding real objects.

Augmented reality technology has already been a big hit in the military, automotive and entertainment sectors of applications, but ABI predicts that business will become overshadowed by mass-market adoption.
 
The study calls for the development of global databases to store a variety of geo-tag information. That will be aggregated from information contributed from governments, businesses and individuals.

End-users will be able to view information on notable buildings, retail sales or special events, or simply to mark locations of interest.
 
Mr. Fisher said that the most surprising finding of the study was the lack of companies involved with sports-related augmented reality. He said that the study found that only one company is providing augmented reality applications for televised sporting events. Those features include moving the first down line in football and the strike-zone animations in baseball.

?Augmented Reality is rooted in the concept of adding information to visual displays,? Mr. Fisher said. ?Digital marketing campaigns incorporating Web-based augmented reality graphics can add new dimensions to the kinds of content available for online advertising.?

Mr. Fisher said that augmented reality applications will compete with standard applications in several areas.

For marketers to find success with augmented reality, the applications will have to offer better information, an intuitive user interface and other features that are not possible through existing applications.

Mr. Fisher said that augmented reality can also be used for mobile commerce.

?Here?s one possibility: Imagine going into a store, aiming your smartphone?s camera at a product and having the display show not only the product, but competitive pricing at online venues,? Mr. Fisher said.

?Currently, mobile augmented reality applications require a smartphone or other handheld device with a camera, GPS and compass capabilities, as well as adequate processing power,? he said. ?Augmented reality applications eventually will run the gamut of consumer interests.?