The arrival of GPS receivers in cell phones led to a boom in location-based apps and services—everything from maps that show you where you are, to new kinds of social networking. But step inside a building and GPS often fails. Now a startup has technology that enables devices to know their position inside a building to within a few steps, and it hopes this could lead to a second wave of indoor location-aware services.

WiFiSLAM, which publically demonstrated its technology for the first time last week, enables a phone to work out its position by combining the "fingerprint" of nearby Wi-Fi networks with information taken from a device's accelerometers and compass. The company was founded by students from Stanford University, with the aid of the university's StartX accelerator program for startups.

Mobile devices already use Wi-Fi networks to refine outdoor GPS fixes by accessing databases maintained by companies including Skyhook and Google, created by driving around "sniffing" for wireless networks. However this technology can today only allow accuracy of 10 meters at best and is primarily aimed at outdoor use.

The technology is typically accurate to within a "couple of steps" of your current location, says Anand Atreya, cofounder of WiFiSLAM: "This accuracy will change how you interact with indoor environments." The technology could aid with navigation inside large and complex buildings such as hospitals or airports, he says, adding that app developers will likely find more imaginative uses, too.