Developers are finding genuine and fascinating uses for augmented reality applications on devices such as the iPhone 3GS and Android handsets, but it's still something of a novelty as much as a vital feature.

But a new report from Juniper Research is pegging augmented reality - a system that overlays information on the real world by combining data with a real-time camera image - as the next big thing in mobile advertising revenues.

By 2014, the report says, the augmented reality market could be worth as much as $732 million, grown from an estimated $2 million the feature is likely to yield next year. These figures come from three different revenue streams - buying an augmented reality game or application, in-app purchases or subscriptions, and embedded advertising.

The gimmicky nature of augmented reality has seen a slow uptake from venture capitalists at the moment, however, which doesn't bode well for an overnight explosion.

These capitalist companies are all over smartphones right now, but the lack of an essential, killer augment reality application right now - coupled with the expensive development cycles - is making it a hard sell.

Currently the business applications seem more prevalent than gaming, so there's still plenty of scope for the feature to catch on and begin to blossom.