The new iPhone 3GS adds a compass to the set of sensors. Combined with the GPS, the motion detection sensor and some image change detection via the internal video camera, this enables a new breed of “augmented reality” applications.
NearestWiki for example displays WikiPedia entries about buildings and places in the vicinity.
NearestWiki is not the first augmented reality app for the iPhone, but it is the first that is not tied to a specific region or city (like Metro Paris)
Next versions of the iPhone may feature more precise sensors and a lower latency – giving a much better feeling (e.g. labels not jumping around in the scenery).
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