Google notes the following as one of the many possibilities for future cool stuff to do with mobile phones:
Augmented reality: Your phone uses its arsenal of sensors to understand your situation and provide you information that might be useful. For example, do you really want to know how much is that doggy in the window? Your phone, with its GPS and compass, knows what you are looking at, so it can tell you before you even ask. Plus, what breed it is and the best way to train him.I'm not so sure this is the most interesting use of augmented reality on a mobile device, but it does paint a pretty picture of what might be done. I think that a Street View using imagery taken on the spot would be very valuable, particularly in places with changing seasons (since the panoramas may have been taken in the summer and you are standing in a snowy intersection). Tourists might enjoy seeing historical buildings placed into the scene they are standing in front of or getting other useful directional information placed onto their screens.
The list goes on, and who knows -- maybe the techniques I'm researching for my thesis will help make this more feasible, since it could help provide much more accurate camera positions and therefore better augmentations. Exciting times.