LONDON/PARIS Augmented reality (AR), used for deadly effect by the movie character The Terminator, is poised to move into the mainstream as large companies build the technology into devices, according to a pioneer in the sector.
AR overlays text, graphics and sound on images viewed on smartphone or tablet screens, on PCs or through dedicated glasses. The latter has been a feature of science fiction books and movies for decades.
The boom in smartphones led by Apple's (AAPL.O) iPhone, which has location capabilities, cameras and sufficient processing power, has enabled people to try out the technology for themselves.
Layar, a Netherlands-based AR company, has seen its software downloaded to millions of devices, mostly for applications using location technology to provide place-specific data such as upcoming events, directions or other details about a venue.
However, co-founder Claire Boonstra said the technology as yet could not pinpoint places accurately enough to make it much more than a novelty.
"We won't say it will never hit gold, but so far we have not seen big usage," she said at the Reuters Global Media Summit in Paris.
Nevertheless, technology heavyweights are moving in to incorporate AR into devices, meaning users will not have to download separate software.
Intel (INTC.O) has followed Qualcomm (QCOM.O) in working on getting AR features into chipsets, an executive of Intel's partner Total Immersion told the summit.
"What we are doing together with Intel is working on their chipset ... so inside the chipset you can have some AR features, like gesture recognition that can be transferred from software to hardware," Total Immersion's marketing chief Antoine Brachet told the Summit in Paris.
Moving AR features into hardware will make them faster to use for consumers and could boost take-up of the new technology, said CCS Insight analyst Martin Garner.
"Getting into big scale depends on that," he said.
Layar has reached more than 10 million smartphones through its applications -- making it a big hit in the new industry -- but has so far created no revenues.
The company has the luxury of a couple of years of venture capital funding from Intel Capital before it has to make money.
Seeking revenues, Layar has shifted towards visual recognition applications, in which data, such as a web link, is overlaid on advertisements or billboards.
In doing so it is hoping to tap into a market so far dominated by Total Immersion. Brachet echoed her view: "Until it's proven you can draw business from geolocation we will not focus on it."
Layar has partnered Dutch magazine Linda, founded by television presenter Linda de Mol, to create 50 pages of AR content in this month's edition to showcase its potential.
"We are early stage with this one, but the traction is so enormous that we really believe that there is a really interesting business here," Boonstra said.
She said the company had been "completely overloaded" by requests following the trial, ranging from the largest car manufacturers, fast moving consumer goods (FMCG) companies and retailers, who wanted to add links to ads, to musicians wanting to augment their flyers.
The advertising industry, however, was not getting over-excited by AR, William Eccleshare, President and CEO of billboard company Clear Channel International, told the summit.
"I think it's quite a long way off," he said.
"Plasma screen digital technology is going to be very significant, there will be 3D, there will be some form of augmented reality, but at the moment it's pretty niche."
(Reporting by Paul Sandle and Tarmo Virki; Editing by Hans-Juergen Peters)