Layar, an augmented reality iPhone application, has been pulled from the App store.  The company recently raised $1 million in funding to help it lead the quickly growing space of augmented reality applications for the iPhone, but due to technical issues, have decided to take a step back.

"After a flood of complaints that the app crashes for many users, we've decided to remove the app from the store.  Sorry, sorry, sorry," said Dirk Groten, CTO of Layar.  "We had issues already since the very first launch of the iPhone app. Unfortunately these issues were due to bad memory management decisions right from the start, something that we could not easily fix without completely re-engineering the app."

In case you've never heard of Layar, the way it works is it makes use of the iPhone camera and compass so as you look through your iPhone screen, information is overlayed on top of objects you see on your screen.  The company markets itself with a tagline "Browse The World!"  A good use case for Layar would be for travel and getting information about old buildings around you, etc.  

The company recently launched version three of the application.  Groten said that the, "percentage of users with crashes has grown too much with the launch of v3 to justify keeping the app online. We don’t want our users to be confronted with an app that is unusable due to systematic crashes."

Unfortunately for Layar, there are several other companies coming up in the augmented reality space including Tonchidot, which just raised $4 million for its Sekai Camera application, and another startup Metaio, for its Junaio application.