Despite a large number of augmented reality (AR) picture books available on the market, their quality varies. The aim of this study is to analyse AR picture books' features, benefits and drawbacks through a review of academic literature and award-winning commercial works on the subject and to provide insight into future trends. Our approach has the potential to benefit book designers, publishers, educators and instructional designers. First, the search scope was defined, we identified 30 academic papers that met the selection criteria and classified them by type and year. Next, 12 award-winning AR picture books on the commercial market were selected and reviewed to illustrate recent advances in the application of AR technology. We concluded that future trends in AR picture books would blur virtual and physical realities more seamlessly, enhancing but not distracting audiences through real interaction.