The ‘Wow factor’ of Augmented Reality on phones has runs its course, but on tablets? That’s a different story. Now that the iPad 2 has opened the door to iOS developers building tablet-optimised apps that take advantage of cameras and that’s exactly what Germany’s Metaio has been doing.

The video below shows its initial experiments in Augmented Reality on the iPad 2. “We were really surprised to see how powerful the 3D hardware is,” explains the company’s CTO Peter Meier. “It allows us to create really sophisticated virtual content and interaction concepts.”

Will people want to hold something so large up to take advantage of AR? Meier thinks the advantages are great enough that people will. “AR will become a part of our daily lives, when AR experiences meet people, where they spend most their time: inside their homes or inside their workspaces. The iPad is perfectly built for AR shopping and AR casual games.” German developer Augmented Minds is already working on bringing its Zombie Shooter game (at the end of the video) to the iPad 2.

Another potential arena for AR is in business. Meier expects tablets to drive the usage of AR for professional use cases, especially training, service and maintenance. The example of instructions for replacing a printer ink cartridge that we recently covered would certainly make more sense on a tablet than a phone.

Metaio plans to bring its Junaio AR browser app to the iPad 2 soon.

UPDATE: Here’s another video we’ve just been sent, showing String‘s AR technology being tested on an iPad 2. There really are some exciting possibilities here.