The growth of new mobile technologies such as augmented reality and location-based services is driving adoption of sensor devices that can detect environmental conditions such as speed, temperature and direction.

By 2016, there is expected to be around 4 billion MEMS (Micro Electro Mechanical Systems) sensor devices in circulation, according to Juniper Research. The majority of these will be motion detectors such as accelerometers, gyroscopes and compasses, which are increasingly being built into smartphones for use alongside new mobile applications.

Juniper said that, from a mobile device standpoint, Apple is primarily responsible for spurring demand for MEMS, which allow iPhones and iPads to detect the tilt of a device and orient the screen accordingly. However, other smartphone manufacturers are now building similar sensors into their devices, and games consoles such as Nintendo Wii are also driving adoption.

Juniper predicts that annual revenues generated by MEMS devices built into mobile phones - including sensors, audio, displays and radio frequency components - will exceed $6.3 billion by 2016. However, unit prices for MEMS devices will continue to fall rapidly, meaning that vendors will need to have guaranteed volumes in order to commit to cost and price reductions.

"MEMS sensors, especially accelerometers and gyroscopes have experienced a dramatic reduction in price over the past few years," said Juniper Research analyst Nitin Bhas, who wrote the report. "Increasingly vendors need to create or add value to their products by incorporating more functions into a single MEMS device, thereby further reducing size, complexity, and cost".

MEMS devices were a prominent feature of the 2012 Consumer Electronics Show in Las Vegas, not only in smartphones and tablets but also printers, pico-projectors, digital cameras, microphones and hundreds of other products.

While accelerometers and compasses are now commonplace, the next big thing will be barometers, according to Frank Melzer, CEO of Bosch Sensortec. Barometers can detect tiny fluctuations in air pressure, enabling them to calculate relative changes in altitude, such as when a person climbs a flight of stairs.

This means that smartphones will be able to detect what floor of a building the user is on, allowing them to navigate using interior maps of museums and shopping malls, said Melzer. MEMS barometers also help positioning technologies such as GPS to work indoors.