The projector uses a single rapidly moving mirror to deflect a laser beam and produce and image, the report said. Alternative mirror-based projectors, developed by Texas Instruments Inc., use thousands of micrometer-sized mirrors on a single chip to compose an image.

Having achieved a size of 16-mm by 9-mm by 9-mm, Fraunhofer's projector could be used to project images from mobile phones, PDAs or laptops, allowing small portable devices to also offer large high-resolution displays, the report said.

The prototype only works with red and blue lasers and so does not offer have a full color gamut and green diode lasers are not yet small enough for inclusion in the device.

The Fraunhofer projector is smaller than a monochrome projector shown by startup company Light Blue Optics Ltd. (Cambridge, England).

Light Blue Optics raised $2.5 million in seed funding from a consortium led by U.K. venture capital group 3i plc on the strength of its matchbox-sized monochrome projector in July 2006. The company is also reported to have demonstrated a color version of its display which uses a electronically-controlled liquid crystal spatial light modulator to modulate red, green and blue beams, but the demo operates on an optical bench.