olnwt.org

By IAN SHERR

The patient might have been under water too long. Only a few months old, the victim wasn’t responding.

A doctor, in green surgical scrubs, rushed to his sparkling clean operating room, hopeful the patient could be saved.

After thoroughly scrubbing and putting in some new parts, he tightened the last screw and pushed the power button. The familiar Apple Inc.

logo filled the screen of the phone.

The iHospital is a chain of stores that fixes broken Apple products but takes Apple-care to new levels, Ian Sherr reports on Lunch Break. Photo: Julie Busch Branaman for the Wall Street Journal.

This doctor works at the iHospital.

The chain of repair shops is one of many firms that have sprung up and build their business largely by repairing Apple devices. Far from the dingy, box-and-cord littered shops of the past, these businesses have taken on the Apple ethos with slick presentation and savvy brand building. Their customers come hoping to pay less for repairs than at Apple’s own stores.

“There are about 250 Apple Stores in the U.S., but there are millions of customers,” says Ross Newman, the 27-year-old founder of iHospital, based in Tampa, Fla. “They need somewhere to go to fix their products.”

Other repair shops range from iHospital to Cupertino iPhone Repair in the San Francisco Bay area, to Orlando, Fla.-based uBreakiFix Co. which has stores around the country including in Chicago and Los Angeles.

Apple’s own warranties are considered among the best by Consumer Reports. But until recently the company charged a hefty premium to fix broken screens or water damage—all too common problems as people take their beloved devices almost everywhere, even to the bathroom. The independent stores say they can fix devices for roughly half the cost as Apple.

Apple doesn’t have any ties to the stores. An Apple spokeswoman said Apple’s new AppleCare Plus policy for the iPhone costs $99 and will cover up to two incidents of accidental damage at a cost of $49 each time. The service, which lasts for two years from the date of purchase, also includes technical support in Apple’s stores and over the phone.

Mr. Newman says he can compete. A new front screen for an iPhone would cost about $150, including the cost of signing up for AppleCare Plus and the incident charge. The iHospital charges roughly between $79 and $100 for that same repair, depending on the model. And, Mr. Newman added, his doctors offer tech support and a one-year warranty on repairs. Other repair shops offer similar prices and services.

Keith Fredrickson, 34, and his wife Margaret, 35, of Jersey City, N.J., each bought a brand new iPhone 4S a couple of months ago. A few days after Ms. Fredrickson got her phone, it slipped out of her back pocket in the bathroom. “She had already flushed the toilet, thankfully,” Mr. Fredrickson says.

Once out of the water, the device wouldn’t turn on. They tried putting it in a plastic bag filled with rice, a common recommendation, but it didn’t help. Placing it in a bag with moisture-absorbing desiccate packets from vitamin bottles worked, but only for a few moments.

So, Mr. Fredrickson took the dunked device to an iHospital.

“I walked in and noticed they were in scrubs, and thought it was mildly entertaining,” Mr. Fredrickson says. “I was traumatized and nervous about whether they would fix it.”

They did.

Water damage is among the most common ailments for devices, repair-shop operators say. Hayden Dawes, 25, who formed iBroke LLC in Palm Beach Garden, Fla., last year, says many of the customers who ship him their broken devices have had some sort of liquid damage.

Apple doesn’t supply parts to either business. Both Mr. Newman and Mr. Dawes say their parts come from China, where most of Apple’s devices are manufactured. Mr. Newman says he didn’t have to ask Apple for permission to use the lowercase i and had no trouble getting iHospital registered as a trademark in the U.S. and Europe.

To drive home an image of Apple-level quality, Mr. Newman created a certificate program called D.i.D., “Doctor of iDevices,” which requires passing Apple’s technical-certification tests in addition to his own. Mr. Newman says employees must retake the exams every year, just like Apple’s in-store technicians.

The company’s six stores have rung up about $1 million each in sales in the last year. The company, founded in 2009, started expanding to states outside of Florida last year. While in training, Mr. Newman’s technicians are typically relegated to the “triage” area, where devices are laid out on an antistatic mat and diagnosed before being brought to the “operating room,” a workshop in the back of the store that has a large glass window for customers to watch what’s going on. There is even a “graveyard” bin for devices to be repurposed or recycled for parts.

Mr. Newman says he plans to expand the chain across the country and to stick with his medical motif. He bought an ambulance to do on-site repairs for corporate clients. He emblazoned it with ads for iHospital, and outfitted it with white flashers, not red, so people don’t get confused.

Mr. Dawes started iBroke with an old Volvo, performing repairs at customers’ businesses and homes. Eventually, he bought a new car and outfitted it with work benches and toolboxes. Now, he does most of his work at an office with a clean room.

He says iBroke fixes between 15 and 30 phones a week, though he expects that to grow. He estimates his revenue was between $40,000 and $60,000 in the past year.

Local customers, like Ryan Smith, frequently come in to iBroke with broken screens. The 26-year-old student says he has broken his iPhone 4 several times getting out of his car.

“I keep my phone in my lap when I drive and sometimes when I get out real quick I don’t think,” he says.

Mr. Smith didn’t go to one of Apple’s stores because he assumed it would charge too much. Plus, “I wanted someone independent to do it,” he adds.

Write to Ian Sherr at ian.sherr@dowjones.com

A version of this article appeared March 21, 2012, on page D1 in some U.S. editions of The Wall Street Journal, with the headline: In This ER, Doctors Operate on Pocket-Size Patients.

By PAUL SKELDON

‘It’s the real world—only better.” This is how Jay Wright, business-development director at technology company Qualcomm Inc., describes the latest buzz technology to grip the digital world.

So-called “augmented reality” is the overlaying of digital information onto the real world, and everyone from games designers to retailers to health-care companies to estate agents are gearing up to use it. While the potential for such technology to change the world is vast, the biggest challenge for its backers will be to convert this virtual revolution into rock-solid profits. Fortunately, there are countless ways this can be achieved, but not all are immediately obvious.

WSJ Europe Technology Editor Ben Rooney speaks to Jim Balsillie, co-CEO of Research in Motion, about RIM BlackBerry’s current place in the smartphone market and what to expect from RIM in the future.

Augmented reality has shifted from its high-industrial beginnings at aerospace firm Boeing Co., where it was used to overlay schematics of complex wiring diagrams onto actual wiring via a headset, to being a tool that offers to bring together the real world and the Internet. Such a confluence of the actual and virtual worlds should already have offered a route to riches untold. But the commercial potential of this new technology is very far from being realized.

In laymen’s terms, augmented reality is defined as computer-generated content—which typically includes graphics, audio and other sensory enhancements—that is superimposed over live images to enhance the real world. In mobile devices, where augmented reality’s future seems to be heading, it uses everyday technology such as cameras, global-positioning systems and electronic compasses. These are built into the phone, in combination with WiFi and broadband networks, to bring together location, orientation and context— all adding up to a richer experience of the world around the user.

Retail Potential

Some early examples of augmented reality in action include an “app” on smartphones that will tell a user the location of the nearest metro station, if he or she just points the phone at the street on which they are standing. Another app, from the Museum of London, will overlay on the phone’s “street view” an image of what the street looked like hundreds of years ago. Augmented reality even allows users to point a so-called “Stargazer” app at the night sky and it will overlay the constellations, stars and planets and facts about them. Others offer the chance to see reviews, menus and comments added onto the view of a restaurant or bar.

Such technology is undoubtedly useful, and in the case of the Museum of London’s app, fascinating to some, but does it have any genuine commercial potential? Mr. Wright believes it has. “The means of monetizing augmented-reality apps won’t be any different to any other app,” he says. “Some will pay to download, some will use app-purchasing and others will be ad-funded. There may well be some new players and some new platforms, but the business models for these apps will be the same as all the others.”

For example, Yellow Pages in the U.S. is testing the use of augmented reality to overlay adverts—paid for by businesses—to street views when the app is used. Meanwhile, in the Netherlands, eBay Inc.

is testing a service that will show users all those people who are trading goods in the neighborhood.

EBay’s vice president of local classifieds, Bob van Dijk, is adamant that the future lies in local sales—that and adding virtual technology to its burgeoning real-estate business.

In the U.K., property website RightMove.com has also toyed with a real-estate app, developed by mobile technology firm Mobile Interactive Group Ltd., which works in the same way as eBay’s proposed new service. In this case, users point the phone up and down the street and the app tells them what is for sale, or to rent, how much it costs and gives the user the chance to contact the property agent.

It’s not only in real estate and classified ads that this new virtual technology has money-making potential, says Theo Forbath, vice president of innovation strategy at software company Aricent Inc..

“The real money lies in turning augmented reality into the consumer space with games, entertainment and education,” he says. “In the next 12 to 24 months you will see it everywhere, changing how people shop, by bringing the advantages of the Web to the in-store experience. It will transform business, allowing for better virtual meetings and it will play a big part on both children’s educational toys and adult education. Think of those headsets you currently get given at museums: These will soon all be apps on mobiles.”

Virtual Tech, Real Money

What is exercising the calculators of venture capitalists the world over, however, is how to turn this technology into something that creates genuine revenue streams.

“Retail and gaming are the obvious areas that can deliver revenues with augmented reality right now,” says Mr. Wright. “There are already shoot-’em-up games you can play, interactively, overlaid onto the real world and there are already many games developers working on such games that will sell at a premium—expect to see them on sale early next year.”

Jonathan Chippindale, chief executive of augmented reality retail pioneer Holition, believes that the future of the technology lies in the consumer arena. “We saw huge interest in our augmented reality screens at the front of Selfridges in London. These allowed people to virtually try on Tissot watches without going inside the store,” he says. “Tissot saw sales of its watches rise by 83% in the store while the trial was running.”

Another area where retailers are set to benefit is in applying augmented reality to technology that is already in widespread use, such as bar-code scanners. Built in to a number of retailer apps, bar-code scanners allow consumers to scan a bar code and launch all manner of information about that item. “EBay has built this into its sellers’ app,” notes Roeland Loof, head of mobile in Europe for the auction site. “Now anyone wanting to sell something can simply scan its bar code and use the information provided to create a sales profile. This makes selling via mobile much easier.”

But augmented reality has perhaps one more potentially lucrative surprise up its sleeve. While much attention has been placed on how it can extend things that already exist, many are starting to look at how it can generate a whole new revenue stream through its use in health care—or more specifically, health monitoring.

“Our research shows that 19 out of 22 health-care professionals already see wireless health-care monitoring as vital,” says Andy Zimmerman from Accenture Ltd. “There are already millions of devices in circulation measuring heart rate, blood sugar, asthma and even whether elderly patients are moving or upright. And consumers appear to be willing to pay, often relatively large amounts of money, to get the data from these devices [on their mobiles] from aging parents so that they can monitor them remotely. It all comes down to the fact that residential care for the elderly is very expensive, so they are trying to look after them at home—and wireless technology helps do this.”

This may not be what most people imagine when they think of augmented reality, but it is perhaps the main money spinner for using data to “augment” the real world.

Mr. Skeldon is a mobile telecoms journalist based in London. He can be reached at reports@wsj.com.

By KEVIN SINTUMUANG

I waited. I had to. It had been built up so much. You could practically feel the air change as the tidal wave of hype came at us from across the Atlantic.

There was this streaming music service in Europe called Spotify that was pure bananas. You could listen to every song you’d want to hear and then some. Free. Legally. And people loved it. The catch? There wasn’t one, really. The user interface was slick and easy. For less than a cost of a CD a month you could have an ad-free version of the service and even use it on your smartphone.

It finally arrived last summer. Friends were sending me playlists they had made on Spotify. Delete. They appeared in the signature of their emails. All right, fine. I dipped a toe in. Meh, I thought. Spotify’s not doing anything that’s been done before. I waited some more. Tracks people were listening to started to clog my Facebook and Twitter streams. It was growing. And then the company announced an apps platform. Apps? I like apps. I waded in further. Wow. This stuff is cool. You can generate a playlist based on your mood in “Moodagent.” Listen to complete albums that have been reviewed on Pitchfork on the site’s own app. Wander into a virtual listening room on Soundrop and add your own selections.

I’m late, I know. But I’m deep into Spotify now and if you aren’t, you should be. Not that music isn’t already fun and engaging, but Spotify, with its apps, collaborative playlists and ability to embed tracks easily into Tumblr and websites (this feature launched earlier in the week) makes it even more so. There’s no reason to be allergic to the hype anymore. It’s the real deal. Jump in if you haven’t already—I’ll see you in the Indie Wok room on Soundrop.

1. GET SPOTIFY

Unlike with other music-streaming platforms that run on your Web browser, you’ll need to download Spotify on your computer as you would a program like iTunes. There are three flavors: a free ad-supported version, an ad-free “Unlimited” version ($4.99 per month) and “Premium” ($9.99 per month), which, in addition to having no ads, lets you listen to Spotify on mobile devices and even access stored playlists when you’re not connected to the Internet.

2. HIT THE APP FINDER

Yes, just like your smartphone, the Spotify desktop client has apps. And they’re awesome, enabling you to explore and discover music in fun and innovative ways. Most impressively, they’re free. Here’s three of the best:

TuneWiki

Singers tend to be a mumbling bunch. That’s why there’s TuneWiki. This app displays lyrics in big, bold text as they are being sung. It’s amazing to discover how off you were about certain lines and, also, how awful some lyrics actually are. Nonetheless, it’s essential for the karaoke crowd and Bob Dylan fans.

Soundrop

Think of Soundrop as an old-school chat room where music is playing. You can join a room like, say, Jazz or Indie Folk, add your own tracks, vote songs up or down in the queue and say hello (with your keyboard) to fellow listeners. You can also start your own room and invite friends to have a listen and contribute to the programming. It’s surprisingly charming.

Classify

When it comes to music on the Internet, classical always seems to be on the bottom of the totem poll. “Classify” helps put the genre front and center and makes it accessible to folks who don’t know their Brahms from their Bach. You can explore music based on composer, period or even instrument. Flute, anyone? Before long you’ll be saying things like “Haydn? I dunno. Kind of overrated.”

3. DISCOVER PLAYLISTS

On Spotify, they’re more than just glorified mixtapes

You’ll probably start off in Spotify by searching for your favorite artists and albums and be astounded by the fact that, wow, they’re all there. That’s fine, but it’s a little like getting a Happy Meal and eating the hamburger before unwrapping the toy—the core of the Spotify experience isn’t songs or albums, it’s the galaxies of playlists to play with. According to Spotify, over 500 million have been created.

At their simplest, they are just mixtapes. But at their best, they are group-curated, constantly changing lists ranging in variety from “Songs of the ’80s” all the way to “The Covers of Phish.” (Not bad even if you hate Phish!) When it comes to Spotify playlists, there’s no such thing as too banal or too rarefied. There are plenty of apps on Spotify that help you find new music, but you’ll most likely be coming back to these two essential playlist powerhouses.

Share My Playlists

The easiest way to share, search for and subscribe to playlists. If this was the only way to navigate Spotify, you’d be fine.

Rolling Stone Recommends

You’ll find some of the most smartly edited playlists here, including many curated by emerging artists and folks like Mick Jagger and Bono. There’s a constant flow of new content, so check in frequently.

4. GET OFF YOUR COMPUTER

Even streamed music deserves better than those tinny laptop speakers

Spotify from Room to Room…

The problem with music on the Internet? It’s centered around the computer. And while that may be the norm these days, it shouldn’t be. Sonos is the pioneer in getting music off your desktop or lap and into the various rooms in your house.

Naturally it’s the best solution for using Spotify around the home sans wires or geeky networking know-how. All you’ll need to get started is a Sonos device (the compact Play:3 at $299 is a good place to start), and the Sonos app for iPhone, iPad or your Android device, and you can start navigating your Spotify playlists without having to boot up a computer. Additionally, Sonos gives you control over thousands of Internet radio stations, podcasts and pretty much every music streaming service that matters.
sonos.com

…and On the Go

Spotify Mobile

Sign up for the “Premium” service of Spotify ($9.99 a month) and download this app and you’ve got Spotify in your pocket. To listen to your tracks without being online, just slide the “Available Offline” switch to “On”—it’s located at the top of the playlist on the app or on the desktop. Free, available for iPhone, Android, Windows Phone 7 and BlackBerry

SpotON Radio

This app generates radio stations based on your favorite artists—think Pandora powered by Spotify. (You’ll need to be a “Premium” Spotify subscriber.) Like the Spotify iPhone app, it’s AirPlay compatible meaning you can wirelessly play songs to devices with AirPlay like the Apple TV and various new docks. Free, available for iPhone

Google Catalogs, Catalog Spree and TheFind.com have created rival catalog-aggregating apps to replace conventional paper ones. WSJ’s Katherine Boehret reviewed all three to see which one works best.

Unsolicited catalogs take up a frustratingly large amount of space in my snail mail, and I can’t remember the last time I ordered from one. Yet there’s something relaxing about sitting down and flipping through colorful, glossy pages to admire an ensemble from Anthropologie, read a recipe from Williams-Sonoma or catch up on trends at Nordstrom.

Catalogs are ideally suited to a device that encourages people to sit back and relax while using it: the tablet. And in the past year, digital versions of catalogs—and more specifically, apps that pull together many free catalogs in one place—have found a home on iPads, Android tablets and Kindle Fires.

This week, I tested three free catalog-aggregating apps to see how well they replaced paper: Catalog Spree by Padopolis for iPad, which includes fast navigation tools; Google

Catalogs for iPad and Android tablets, which offers the most content; and TheFind’s Catalogue app for iPad and Kindle Fire, which has the cleverest way of opening a Web page when you’re ready to buy something. In these digitized catalogs, there are direct links from items to the websites that sell them.

Google

New tablet apps like Google Catalogs let users browse many catalogs in one place.

Each digital-catalog app excels at something different. Catalog Spree lets you clearly mark favorite items and their descriptions with yellow circles—as you might do in a physical catalog. Google Catalogs lets people create collages of various items that can be shared with friends via email or publicly with others who use the app.

The Catalogue app displays weekly email offers along with a brand’s catalog and offers a Visualizer tool that virtually places an item in the viewfinder of your iPad camera, showing how a room might look with, say, a new mirror on its wall.

Visualizer worked well when I used it to see how a mirror looked on a blank wall in my living room. But a shelf that I tried in my bedroom looked a little fake.

Google Catalogs currently has the most content, with over 200 brands, compared with 113 in Catalog Spree and 70 in Catalogue. But Catalog Spree and Catalogue have two upfront advantages: Both were recently updated to look better when used with the new iPad’s screen, and both enable sharing with Facebook.

Katherine Boehret join digits to discuss how well three free catalog-aggregating apps replaced paper versions.

A Google spokeswoman said that a Google Catalogs update for the new iPad is coming soon and that social elements are a priority and on the road map.

All the catalog apps have smart ways of opening brand websites right within their apps, making it easier to buy things. I particularly liked the way TheFind’s Catalogue app did this: Users slide a window shade-like “pull” tab up to reveal the Web page where they can buy the item.

One of my favorite hidden design features in the Catalog Spree app was a quick way to see all catalog pages as thumbnail images when I pinched my thumb and pointer finger together. This helped me quickly see the contents of the entire catalog so I could go directly to the page I wanted, saving me time when I was looking for something specific.

Though these apps are free, the catalog brands can learn how people use them—though this data is aggregated and not tied to specific users. For example, an app knows if you linger on the Frontgate catalog page with the glass-inlay chaise table or open the SkyMall catalog five times in a month. If you’re nervous about this, you can use the apps without signing in, though extras like saving favorites or bookmarking pages won’t work.

The fact that a catalog is digital doesn’t solve the same old supply problems you might encounter with paper versions. I used Google Catalogs to find the Spring 2012 Look Book for a jewelry company called Stella & Dot, but when I tapped on a stylish pair of stone earrings, a message said they were no longer available. The same was true for the next two items I tried.

These apps keep digital catalogs available for viewing regardless of whether the items in them are sold out. Google has a policy of keeping catalogs in the app forever, allowing people to look back at past issues. Catalog Spree and Catalogue keep catalogs in the app for as long as a brand requests, though a spokesman for TheFind, which runs Catalogue, said it may pull a catalog based on content and season if a merchant doesn’t specify an expiration date.

I preferred browsing catalogs on full-size tablets with 10-inch displays, like the iPad or some Android tablets. That’s when it felt the most like paging through paper catalogs, and the items appeared larger. When I used the seven-inch Kindle Fire running Catalogue or the 5.3-inch Samsung Galaxy Note running Google Catalogs, the experience wasn’t as rich.

To de-clutter the coffee table and ease online shopping, tablet catalogs are the way to go.

Write to Katherine Boehret at katie.boehret@wsj.com

A version of this article appeared March 28, 2012, on page D2 in some U.S. editions of The Wall Street Journal, with the headline: Is Browsing a Catalog More Fun on a Tablet?.

A typical day for furniture showroom Suite New York co-founder Kris Fuchs may include helping a developer with schematics for a new condo tower, dealing with a client to personalize a classic Kjaerholm chair or fielding inquiries from a hotelier seeking a midcentury modern aesthetic. All this while her two daughters and long-term boyfriend bombard her with iPhone texts, BlackBerry instant messages and snapshots of, say, a cool side table from a flea market or pictures of the daughters’ colleges of choice.

“My daughters are always teasing me about how bad I am with understanding new technology, but in truth, my business—which requires quite a bit of sophisticated programs to function—runs just fine. It’s getting a handle on my personal life that I find so difficult,” says Ms. Fuchs, who is based in Manhattan and Watermill, N.Y. Photos, she says, are all over the place; her contact list is a jumble.

A tech expert assessed her digital life and offered some solutions.

1. Work and home streamlined

Ms. Fuchs relies on a “vintage BlackBerry,” iPad 2, MacBook and paper Filofax. She’d like one place to store and access everything, with the option to keep some files private, some public and some visible only to her inner circle. Adria Richards, a business technology consultant with San Francisco-based firm Echo Technology Solutions, advised her to go Apple

—even though Ms. Fuchs says she has “a hangup with her BlackBerry” because she likes its keypad and received-message notification. Ms. Richards had Ms. Fuchs upgrade her MacBook to OS 10.7, added a Picasa photo account associated with her email, synced it to her iPad2 and unlocked the PhotoStream function.

In an instant, the last 12 months of Ms. Fuchs’s uploaded images drifted into the cloud—a way of storing data outside a device. She could immediately post the photos to sites like Pinterest and Facebook. Ms. Fuchs’s calender, contacts and email were then synced through Googleapps.

Bryan Derballa for The Wall Street Journal

Ms. Fuchs’s laptop

Bryan Derballa for The Wall Street Journal

The discarded BlackBerry

Ms. Fuchs reluctantly traded her beloved BlackBerry for a iPhone 4S. To organize her thoughts privately, Ms. Richards suggested the Evernote app, on which she could leave voice notes, photos and any uploaded documents not suited for public view, directly from her smartphone. (Pinterest, Ms. Richards noted, does not have a private-viewing gallery at present—so everyone can see what new trend Ms. Fuchs might be working on. Not recommended.)

She now gets her music through Pandora, keeps track of her “to do” list through Remember The Milk, and tracks her expenses via Expensify.

2. Love at first sync

“Everyone told me I’d hate typing on the iPhone, but in two weeks, I was used to it,” says Ms. Fuchs, though she still misses the “ding” that indicates that her daughter has opened her text message. Her one complaint: When her BlackBerry contacts—all 3,000 of them—were migrated into her iPhone, they came through with some categories misplaced (a typical issue).

For her eldest daughter’s college-tour and application process, “now I can take photos and write notes and even take video of the campuses and store them in one place for later comparison,” she said.

That’s something she wouldn’t have considered doing on her BlackBerry—which now acts as a desktop paperweight.

—Heidi Mitchell

A version of this article appeared March 28, 2012, on page D3 in some U.S. editions of The Wall Street Journal, with the headline: Letting Go of the BlackBerry.

By PAUL SKELDON

‘It’s the real world—only better.” This is how Jay Wright, business-development director at technology company Qualcomm Inc., describes the latest buzz technology to grip the digital world.

So-called “augmented reality” is the overlaying of digital information onto the real world, and everyone from games designers to retailers to health-care companies to estate agents are gearing up to use it. While the potential for such technology to change the world is vast, the biggest challenge for its backers will be to convert this virtual revolution into rock-solid profits. Fortunately, there are countless ways this can be achieved, but not all are immediately obvious.

WSJ Europe Technology Editor Ben Rooney speaks to Jim Balsillie, co-CEO of Research in Motion, about RIM BlackBerry’s current place in the smartphone market and what to expect from RIM in the future.

Augmented reality has shifted from its high-industrial beginnings at aerospace firm Boeing Co., where it was used to overlay schematics of complex wiring diagrams onto actual wiring via a headset, to being a tool that offers to bring together the real world and the Internet. Such a confluence of the actual and virtual worlds should already have offered a route to riches untold. But the commercial potential of this new technology is very far from being realized.

In laymen’s terms, augmented reality is defined as computer-generated content—which typically includes graphics, audio and other sensory enhancements—that is superimposed over live images to enhance the real world. In mobile devices, where augmented reality’s future seems to be heading, it uses everyday technology such as cameras, global-positioning systems and electronic compasses. These are built into the phone, in combination with WiFi and broadband networks, to bring together location, orientation and context— all adding up to a richer experience of the world around the user.

Retail Potential

Some early examples of augmented reality in action include an “app” on smartphones that will tell a user the location of the nearest metro station, if he or she just points the phone at the street on which they are standing. Another app, from the Museum of London, will overlay on the phone’s “street view” an image of what the street looked like hundreds of years ago. Augmented reality even allows users to point a so-called “Stargazer” app at the night sky and it will overlay the constellations, stars and planets and facts about them. Others offer the chance to see reviews, menus and comments added onto the view of a restaurant or bar.

Such technology is undoubtedly useful, and in the case of the Museum of London’s app, fascinating to some, but does it have any genuine commercial potential? Mr. Wright believes it has. “The means of monetizing augmented-reality apps won’t be any different to any other app,” he says. “Some will pay to download, some will use app-purchasing and others will be ad-funded. There may well be some new players and some new platforms, but the business models for these apps will be the same as all the others.”

For example, Yellow Pages in the U.S. is testing the use of augmented reality to overlay adverts—paid for by businesses—to street views when the app is used. Meanwhile, in the Netherlands, eBay Inc.

is testing a service that will show users all those people who are trading goods in the neighborhood.

EBay’s vice president of local classifieds, Bob van Dijk, is adamant that the future lies in local sales—that and adding virtual technology to its burgeoning real-estate business.

In the U.K., property website RightMove.com has also toyed with a real-estate app, developed by mobile technology firm Mobile Interactive Group Ltd., which works in the same way as eBay’s proposed new service. In this case, users point the phone up and down the street and the app tells them what is for sale, or to rent, how much it costs and gives the user the chance to contact the property agent.

It’s not only in real estate and classified ads that this new virtual technology has money-making potential, says Theo Forbath, vice president of innovation strategy at software company Aricent Inc..

“The real money lies in turning augmented reality into the consumer space with games, entertainment and education,” he says. “In the next 12 to 24 months you will see it everywhere, changing how people shop, by bringing the advantages of the Web to the in-store experience. It will transform business, allowing for better virtual meetings and it will play a big part on both children’s educational toys and adult education. Think of those headsets you currently get given at museums: These will soon all be apps on mobiles.”

Virtual Tech, Real Money

What is exercising the calculators of venture capitalists the world over, however, is how to turn this technology into something that creates genuine revenue streams.

“Retail and gaming are the obvious areas that can deliver revenues with augmented reality right now,” says Mr. Wright. “There are already shoot-’em-up games you can play, interactively, overlaid onto the real world and there are already many games developers working on such games that will sell at a premium—expect to see them on sale early next year.”

Jonathan Chippindale, chief executive of augmented reality retail pioneer Holition, believes that the future of the technology lies in the consumer arena. “We saw huge interest in our augmented reality screens at the front of Selfridges in London. These allowed people to virtually try on Tissot watches without going inside the store,” he says. “Tissot saw sales of its watches rise by 83% in the store while the trial was running.”

Another area where retailers are set to benefit is in applying augmented reality to technology that is already in widespread use, such as bar-code scanners. Built in to a number of retailer apps, bar-code scanners allow consumers to scan a bar code and launch all manner of information about that item. “EBay has built this into its sellers’ app,” notes Roeland Loof, head of mobile in Europe for the auction site. “Now anyone wanting to sell something can simply scan its bar code and use the information provided to create a sales profile. This makes selling via mobile much easier.”

But augmented reality has perhaps one more potentially lucrative surprise up its sleeve. While much attention has been placed on how it can extend things that already exist, many are starting to look at how it can generate a whole new revenue stream through its use in health care—or more specifically, health monitoring.

“Our research shows that 19 out of 22 health-care professionals already see wireless health-care monitoring as vital,” says Andy Zimmerman from Accenture Ltd. “There are already millions of devices in circulation measuring heart rate, blood sugar, asthma and even whether elderly patients are moving or upright. And consumers appear to be willing to pay, often relatively large amounts of money, to get the data from these devices [on their mobiles] from aging parents so that they can monitor them remotely. It all comes down to the fact that residential care for the elderly is very expensive, so they are trying to look after them at home—and wireless technology helps do this.”

This may not be what most people imagine when they think of augmented reality, but it is perhaps the main money spinner for using data to “augment” the real world.

Mr. Skeldon is a mobile telecoms journalist based in London. He can be reached at reports@wsj.com.