Google has unveiled a prototype smartphone with "customised hardware and software" that enables it to create 3D maps of a user's surroundings.
The device's sensors allow it make over 250,000 3D measurements every second and update its position in real-time.
Google said potential applications may include indoor mapping, helping the visually-impaired navigate unfamiliar indoor places unassisted and gaming.
It has offered 200 prototypes to developers keen to make apps for it.
Google said its Advanced Technology and Projects (ATAP) unit developed the phone as part of a project called Project Tango with help from researchers at various institutions.
"We are physical beings that live in a 3D world. Yet, our mobile devices assume that physical world ends at the boundaries of the screen," the firm said.
"The goal of Project Tango is to give mobile devices a human-scale understanding of space and motion.
"We're ready to put early prototypes into the hands of developers that can imagine the possibilities and help bring those ideas into reality," it added.
Various firms, including Google, have been looking at developing niche technology.
For its part, Google has already unveiled its Google Glass - the intelligent specs due to go on sale later this year.
Earlier this year, the firm said it is also working on a "smart contact lens" that can help measure glucose levels in tears.
Also in January, it bought DeepMind, a UK firm that specialises in artificial intelligence, for £400m.
According to DeepMind's website it builds "powerful general-purpose learning algorithms".
Analysts say that firms have been looking at ways to help bring the advances made in technology to practical use in every day life in an attempt to attract more customers.
"The focus is not just on the hardware or the device, but on what the gadget can actually do," Bryan Ma, associate vice president at research firm IDC told the BBC.
"It is all about taking it to the next level of usage - be it augmented reality, help with basic healthcare or even just creating better maps."
Ma added that once fully developed such gadgets could have huge commercial applications as well - which would help drive demand not only among individual consumers but also businesses and corporate users.
"There could be a lot of opportunity waiting to be exploited in this area," he said.
Last year, Japanese firm Sony filed a patent for a "SmartWig", with healthcare cited as one of its potential uses along with the ability to help blind people navigate roads.
It said the wig could use a combination of sensors to help collect information such as temperature, pulse and blood pressure of the wearer.