Engineers are now playing with prototypes of microprojectors embedded in mobile phones, which shine images the size of TV screens onto walls. The feat requires red, green and blue lasers which, when combined, produce the full range of colors. High-performance, inexpensive red and blue lasers are already used in CD and DVD players, but researchers “skipped the green” for lack of a profitable mass-market application, says Harald Schenk, deputy director of IPMS Fraunhofer Institute in Dresden, Germany.

More powerful batteries and smaller, faster computer chips for mobile phones changed investors’ minds. Laser makers like the Fraunhofer Institute are now receiving a flood of money to develop green lasers. Novalux, a laser maker in Sunnyvale, California, spent $50 million developing its high-precision green laser, which is used in the PicoP, a prototype microprojector built by Microvision of Bothell, Washington. It’s slated for production next year; Novalux expects to recoup its investment by 2010. At the recent Las Vegas Consumer Electronics show, the PicoP “was creating some real buzz,” says Thomas Ricker, an Amsterdam-based tech blogger. Microvision is designing a small fold-up, fabric light shade to allow for outside viewing, says CEO Alexander Tokman.

The devices will likely kick up the price of mobile phones by $150, but increase sizes only slightly, engineers claim. “That’s the beauty, it can be pretty darn tiny,” says Chris Chinnock, an analyst at Insight Media of Cambridgeshire, England. Marketing experts think young hipsters will drives sales. “There’s definitely lots of coolness and wow factor,” says Golan Manor, vice president of marketing at Explay, a Herzliya, Israel-based manufacturer that unveiled a prototype microprojector this month.

If the devices catch on and people start projecting video in bars and other public places, “you’re crossing a very fuzzy line” into public viewing, says Mike Hudack, CEO of New York-based blip.tv, a video Web site. That may also give the movie and video industry some digital-rights angst. The little green laser, it seems, is set to have a big audio-visual impact.