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layar_android_applicationSoon after landing $1 million in funding, Layar, one of the pioneers in the emerging augmented reality space, has withdrawn its Layar v3 application from the Apple App Store because it keeps crashing on too many users.

The app, which superimposes data on top of mobile phone browsers — like housing prices on top of street views, or restaurant menus when you point your handset at a restaurant — has had the problem since its launch. The Dutch company attributes the issue to poor memory management and unknown buggy code that will require the app to be reengineered from the ground up — a process expected to take several weeks.

Layar went ahead with the third version launch even though previous iterations of the app proved problematic for 20 percent of users. And it says it hasn’t experienced any crashing with this version through extensive testing. Still, it has received too many complaints to keep it in the App Store. It is, however, still available on Android phones.

The setback could cause Layar to fall behind competitors like Tonchidot, AcrossAir, Junaio and Wikitude. With so many companies entering the augmented reality space quickly, hiccups like this could prove costly. It’s an area that could soon become saturated, pushing stragglers out of business.

That said, Layar’s problems don’t reflect too well on augmented reality either. It’s such a young concept, that if one of its frontrunners bites the dust, investors could get skittish and choose to invest elsewhere. Layar’s first $1 million, closed in October, was unattributed.