A film projector in a mobile phone?

A few years from now, you might be able to carry a home cinema system in your pocket.

Finland's Upstream Engineering is working on an LED projection system that potentially could, because of its small size and relatively low cost, allow manufacturers to put projectors inside MP3 players, mobile phones or other portable electronics at a cost of just a few pounds.

Instead of passing around a phone to show off a video or a picture, the image (or video) could be blasted onto a wall. The picture brightness won't be as high as that of standard projectors, but it would let pictures on phones and music players escape the confines of the small screens on those devices.

The current prototype projector optical engine created by the company is about the size of a matchbox. An accompanying projector would be about the size of a mobile phone. Currently, some companies make small projectors, but they are larger, about the size of a mini personal video recorder.

The reduction in size comes from a technique invented by Upstream for channelling the light from LEDs to a display in thousands of small beams. Light, whether from a candle or an LED, naturally shines in every direction. Upstream has built a complex micro-optical system that collects that light close to the source and sends a huge proportion of it to an intended target. The so-called 'photon vacuum' optical system surrounds the LED like a shell.

As a result, a tiny optical package can provide roughly the same level of illumination efficiency that larger systems can.

"The idea is to collect every single ray and direct it to the display itself," said Mikko Alasaarela, president and founder of Upstream. "We've been approached by about 150 companies" from many industries, he added.

Some start-ups in Silicon Valley are also working on technology for focusing LED light, said Dave Epstein, a partner at venture firm Crosslink Capital.

These days, everyone loves LEDs. Researchers in Japan hope to use the lights to wirelessly transmit data between cars, while TV and display makers are putting them in more products. Not only do they consume little power, LEDs last for years and don't contain mercury, a toxic element used in small quantities in some electronic devices.

LED projectors also have the potential to be cheap because Upstream's ornate optical system won't be assembled out of many parts. The optical shell will be stamped out of plastic on injection-mould production lines. The basic Photon Vacuum system, which consists of an LED with the integrated optical system, can likely sell for under £5 in high volumes.

Upstream's intellectual property revolves around the optical engine. It doesn't make the LED itself, but obtains these from manufacturers such as Lumileds, currently owned by Philips. Prototypes are being manufactured by contractors in Europe and Asia.

Mitsubishi and a few other Japanese companies have started to sell LED-powered projectors, but they cost several hundred pounds and function strictly as projectors.

Upstream is something of a family affair. Alasaarela was working at Nokia back in the '90s when he heard executives tout how phones might someday contain projectors. He left the company to found an enterprise software company.

During this time, he ran into a cousin who has become one of Finland's premier optical scientists. They hadn't seen each other for years, but Alasaarela began to pitch him on the idea of small projectors.

"I hadn't seen him since we were teenagers," Alasaarela recalled. "'It can't be done,' he said, but I insisted."

Despite many obstacles, the two continued to pursue the idea until, at one point, his cousin realised that, although it is not possible to reach perfect light-power performance in a small space, a device could be developed that would come close.

Currently, Upstream illumination performance is not yet good enough for a commercial launch, but the company believes the technology could approach 70 per cent to 80 per cent illumination efficiency. If the company can get to around 60 per cent, mobile phone makers will become interested, Alasaarela said.

Problems remain, though. Although the company has ironed out many of the basic issues with design and manufacturing of the lighting system, research still needs to be performed on perfecting the quality and performance. One major issue that needs to be tackled is the mould that stamps out the polycarbonate shell. The pattern on the mould is created with lithography, the same technique used for making chips.

"The master mould is not quite satisfactory," Alasaarela said, but added that the company hopes to have a commercial quality engine ready in 2006.