One of the biggest buzzes currently running through the world of consumer applications is augmented reality (AR). Put simply, it is the layering of location-relevant data onto video, a concept that's been around for several years, and not just in sci-fi movies like Terminator and Minority Report.

For example, every time you've watched a soccer match on TV and the producers have superimposed graphics - perhaps to show the distance to goal when a player takes a free kick - you've been watching rudimentary AR in action.

Now, however, with the advent of smartphones equipped with increasingly accurate GPS devices, AR is being tipped by many analysts to become a genuinely useful tool at home and at work.

A typical mobile AR platform, such as Layar - created by the eponymous Amsterdam-based start-up - allows a user, walking down a street holding a smartphone streaming live video, to see an overlay of data from selected sources, such as real estate prices or restaurant star ratings, as and when relevant buildings come into shot. Layar was downloaded 500,000 times in the six months following its launch, and boasts more than 1,000 developers building third-party apps to work on the platform.

Seeing its huge potential, industry gorillas such as Apple, Google and Microsoft are jumping up and down with excitement. The latest iPhone 3GS now allows third-party apps to superimpose graphics on live video, while devices based on Google Android have been supporting Layar and other AR apps for several months. Microsoft, meanwhile, has showcased its own prototype AR software based on image recognition technology.

Some immediately practical business uses are not far away, such as goggles that will direct mechanics when fixing a faulty engine - these are currently being tested by the US Marines, who are finding they halve the time it takes to identify and begin a maintenance task. IT chiefs will naturally be keen to examine what value the technology can bring to their organisations.

Layar co-founder Maarten Lens-FitzGerald is certainly not underplaying AR's potential. "Augmented reality is going to be huge," he says. "It might even be as big as the web."

Data feed

• Sales of augmented reality (AR) technology will be just $2 million in 2010, according to Juniper Research. However, the market is predicted to surge, hitting $732m in 2014.

• The main revenue streams for AR will be paid-for downloads, subscriptions-based services and ads; but from 2012-13 onwards these will be bolstered by revenues from mobile-enterprise, says Juniper.