It seems like Orange Israel wanted to pull something special for their iPhone launch. For this purpose they had Ogmento, an augmented reality focused developer, prepare an iPhone app.
The concept, that you might have seen before, consists of making stuff appear whenever the app recons a certain pattern. In this case, you'll need to point your iPhone at the Orange logo which will have it display an iPhone.
You can then interact with it via the touchscreen. Check it out:
Absolutely, what's better than an iPhone? An iPhone in an iPhone.
