Since October 2001, 95 per cent of US mobile phones have had to be location-aware, to within 150m, so that emergency services can pinpoint accidents. In the UK, if you're desperate, dial 1501 and the system will sense where you are and tell you the nearest McDonald's. Cellnet can already also tell you about local cash machines, petrol stations and the like.

As the technology matures and as resolution improves to 10m or so, I'm looking forward to a bunch of new applications for mobiles and PDAs.

At worst, Big Brother could look over your shoulder from inside your pocket. The state could know everything they know about you already and track your movements, too. Keeping tabs on us all will become a whole lot easier, and automatic, though really sophisticated baddies will doubtless lay false trails by posting their palmtop to Croydon or just turning the thing off.

The next couple of years are going to be a heady time for civil liberties doomsters and those who bridle at the thought of hordes of electronic coupons appearing as you shop. However, my guess is that location-aware computing will creep into our lives in myriad rather delightful ways. It won't just be traffic and parking information either.

Of course, there'll be no excuse for getting lost again because a little marker superimposed on a map can show you exactly where you are. But it gets much better than that. Users of instant messaging services on the internet will be familiar with buddy lists that enable you to see immediately which of your friends are online at that moment and send them a message that pops up instantly on their screen. The best services enable you to make yourself invisible to undesirable people or search for others online who have particular interests (or proclivities).

Now imagine the location-aware version. On the map you see little markers representing each of your pals who happen to be nearby. Two minutes later you're all keeping another café in business.

Or perhaps you search for strangers in the vicinity with similar interests, and arrange an encounter. Yes, it could get sleazy, but with the right controls it could be a delightful new way to meet people. Ironically, the internet that has done so much to take geography out of relationships could, when combined with location-aware computing, reintroduce face-to-face contact and even foster "community". Real communities, after all, are where people meet and talk, and share chocolate éclairs.

The ability of computers and their applications to know where they are is only one side of the coin. What about objects in the real world taking their places in the virtual one? Researchers at Hewlett-Packard Laboratories are developing a system called Websigns that provides instant linkage between buildings or other physical entities and relevant resources on the web. Basically, you put up a radio beacon and anyone who comes within range, and whose device is receptive, can click on your URL. Infra-red beacons would work the same way, but users only see links when they actively point their device at, say, a symbol on the building or an advertising hoarding.

Of course, not everyone need see the same links, even though they might point their devices at the same beacons or be in the same area. There might be special offers for some, or a map and services in a tourist's own language. As we move around, a constantly changing set of URLs would appear on our devices, personally relevant and always local. Think of the possibilities when our PDAs are themselves Websigns. Aim your PDA at a chap to see the version of his website he wants you to see.

There's plenty of scope for over-enthusiastic marketing, but new location-aware applications, especially the ones that connect us with other people, will be compelling enough to make us want to leave our digital assistants turned on. Some areas may sell themselves on being free from promotional activity. Who knows, we might begin to see up-market spam-free éclair-selling coffee-shops that only make themselves attractive, visible even, to posh people speaking the right language. There's a niche.

jdrori@thoughtsmith.co.uk

Jonathan Drori is managing director of Thoughtsmith, a creative, technology and business strategy company