The L.A. Times reports that Apple will begin allowing developers access to the tools they need to produce augmented reality applications starting with upcoming iPhone OS 3.1. While there have been many impressive demos floating around showing the possibilities, these applications have used unpublished APIs which prevent them from being allowed on the App Store. Apple, however, told one developer that the tools necessary would become available with iPhone 3.1.
Apple told Acrossair, developer of the Nearest Tube train finder, that the app will be approved for distribution after Apple releases version 3.1 of the iPhone software, which the developer expects will land in early September.
The New York City version of this app is called Nearest Subway and is demoed in this video:
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Augmented reality uses the device's GPS, camera and digital compass to overlay real-time data onto live video. Other possibilities include iPhone games as well as the Layar browser we've highlighted before. iPhone 3.1 has been seeded to early developers but the exact release date has not been revealed.