To sci-fi fans, the concept of Augmented Reality conjures up that memorable scene in Steven Spielberg’s 2002 movie Minority Report in which Tom Cruise’s character strolls through a mall while being assaulted by marketing messages of a highly personal nature. A Guinness billboard addresses him by name and tells him he could use a drink; in the Gap store, a hologram of an assistant asks him if he is enjoying his previous purchase; an American Express advert shows a giant 3D credit card embossed with his membership details. It is an unsettlingly depiction of an advertising nirvana, all made possible by the supposed existence of retinal scanners.

Although Minority Report envisaged life in 2054, the recent interest ignited by augmented reality – or AR, as this entire class of context-sensitive computer-generated imagery has quickly become known – suggests such virtual intrusions will be with us far sooner. Indeed, science fact is closer to the fiction of earlier films such The Terminator, in which robotic eyes see relevant text information superimposed over the world they survey. The smartphones many of us already carry can pull off this same real-time subtitling trick: the combination of GPS technology, tilt sensors, tiny cameras and compasses allows these portable devices to identify objects and compare them to geo-tagged databases for further background. According to Juniper Research, those mobile capabilities will combine to generate €540m in AR-related revenues from paid-for app downloads, subscription-based services and advertising by 2014.

Hollywood may have helped popularise this futuristic vision, but Europe has taken the lead in commercialising the enabling technologies, particularly in mobile AR. What began more than 20 years ago as a niche technology for military, medical and heavy industry has suddenly crossed into the consumer realm, propelled by such innovators as the Netherlands’ Layar – which claims to have created the first mobile AR browser – Austria’s Mobilizy, Sweden’s The Astonishing Tribe (TAT), Germany’s Metaio, the UK’s Acrossair and French outfits Presselite, Nomao and Total Immersion. Meanwhile, Finland’s Nokia is among the entrenched mobile players preparing a slew of AR applications, which may well be built into the new-generation Nokia phones, in the same way that NAVTEQ maps are embedded in current models.

Europe’s pre-eminence in this hot new field is not entirely coincidental. “The EU funds very ambitious research projects to stimulate innovation and bridge the gaps between academia and the industry, which can speed up the process for ideas such as AR to leave the labs and be turned into commercial applications,” notes Dan Gärdenfors, head of user experience research at Malmö-based TAT.

According to Claire Boonstra, content and community chief and one of the three co-founders of Layar, the next step for mobile AR is moving from “functional AR to experience AR”. Most current users, she points out are enthusiasts and other early adopters. The mobile AR companies therefore need to convert the initial wow factor into an engaging user experience for a larger audience. Layar’s 3D capabilities, Boonstra believes, will allow brands and agencies to create immersive experiences that cannot be replicated on a map, in a traditional browser or in a mobile location-based application. For example, completion of the dazzling new Market Hall in Rotterdam is planned for 2014, but visitors and inhabitants can already see what it will look like, simply by pointing their phone at its construction site. The 3D model lets the visitor walk around the building and look inside – as if it were already there.

“The best comparison I can give is that AR is now like the web was at the beginning of the 1990s. It was cool for a small number of people but it hadn’t broken through,“ says Maarten Lens-FitzGerald, another Layar co-founder and the company’s general manager. “What will happen is that AR will become a greater part of people’s lives. The technology will improve when the mapping and tracking on the phones improves. Soon phones will be able to recognise a particular window pane out of hundreds, say – there could be a vase on a window sill, for instance and when you move the phone back and forth the vase will remain in the same place.”