Virtual Reality has been a mainstay of sci-fi for decades but 2010 could see a pared-down version become mainstream.
Augmented reality (AR) has had a quiet launch on mobile handsets but it set to explode next year, experts say.
AR is a technology that allows data from the web to be overlaid on a view of the physical world.
Although a relatively small sector at the moment, analyst firm Juniper Research predicts that AR will generate incomes of $732m (£653m) by 2014.
AR allows mobile operators to combine the increasing functionality of smartphones, such as GPS, video and accelerometers, with the increasingly available number of location-based apps.
Already mobile phones use location technology to help people find their way around, such as an iPhone app developed by UK firm Acrossair to help people find their nearest tube station.
US location-based social network Brightkite allows users to find friends in their vicinity simply by turning on the camera on their mobile phone and pointing it around them.
If any of their friends are in the same location, they can see their posts and photos.
Futurologist Ian Pearson predicts an explosion of such services next year.
“I’m surprised we haven’t got there yet. But it makes a lot of sense if a friend is a street away then you can meet up for coffee,” he said.
And it won’t end there as the physical and virtual worlds increasingly blur, he says.
“Instead of seeing people as they are you might well be able to see their Facebook profiles appearing as bubbles above them,” said Mr Pearson.
This is likely to raise some very important privacy issues but Mr Pearson thinks users will be in control of what others see.
“It will be up to individuals to set the privacy levels,” he said.
Next year will see a range of “experimental” services rolled out as mobile firms grapple with how to make money from AR, thinks Martin Garner of analyst firm CCS Insight.
“It is an exciting area for mobile. It is a way for them to define a new area of the internet because phones can do it in a way that the desktop can’t,” he said.
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