What components do you need to get Augmented Reality (AR) technology running on your mobile phone? Here is the formula:
AR = 3D sensors + 3D camera + 3D display
AR needs the orientation of the phone measured by internal sensors: accelerometer, gyroscope, and compass. AR needs a 3D camera to know where the real objects in the world are. Finally, AR needs 3D graphics to show virtual objects at the right position & orientation, at the right scale.
We are lucky we have had high quality 3D graphics on our phones for a while now. The real novelty is in the 3D sensing. The inertial sensors and the camera work together to find out where the camera is and how it is oriented, relative to the objects in the scene.
Put together, AR shows us the combination of real and virtual objects, correctly.