Can adding WiFi location to GPS fill in the missing piece in the puzzle of LBS commercialisation, Keith Dyer asks?
Yes, we've been here before. We've even written this intro before at Mobile Europe, but it seems that finally we are now seeing the birth of a sustainable and commercial location based services market.
In 2007, North America generated 81% of the world's Location Based Services (LBS) revenue. In 2013, that percentage will be just 32%. In the same period, Western and Eastern Europe's combined LBS revenues will jump from just 5% to 31%. The Asia-Pacific region, meanwhile, will see a rise from a 2007 share of 11%, to 27%.
"Location based services are not a zero-sum game," says ABI Research principal analyst Dominique Bonte. "It's not that Americans will lose enthusiasm for LBS. These changing shares of global LBS revenue just reflect the fact that a market which for technical reasons has been largely restricted to North America, will finally grow strongly in other world regions."
LBS's slow uptake outside North America has had everything to do with the fact that unlike the CDMA phones so prevalent there, which have utilized GPS to comply with the United States' E911 regulatory mandate, the GSM handsets owned by most users in Europe and Asia have not generally offered native GPS support. However with the broader proliferation of GPS-enabled GSM handsets in those other regions, and with the quickening rollout of 3G services worldwide, the opportunities for LBS service offerings will grow quickly.
That's not to say that the same applications will be adopted at the same rate everywhere, or that LBS revenues will be uniform. "Since most LBS application developers sell to the world, and most of their products are platform-agnostic, the cost per service for users is likely to be similar in all regions," says Bonte. "However, a navigation service can cost as much as $9.99/month, whereas friend-finder services might only be $2.99. On that basis, as well as via cultural preferences, particular services will be popular to differing degrees in different regions. That can affect the total revenue to be generated from a particular region."
Another great boost to LBS this year has come from just one direction, Nokia, which has seen regulatory approval for its takeover of Navteq. More significantly, perhaps, Nokia is tying in GPS to more and more of its phones, and adding a service layer on top of that through Nokia Maps, one of its Ovi services.
Paul Lee, telecoms director at Deloitte, comments, "Nokia's announcement that it expects half of its mobiles to have GPS by 2010-12 should not surprise. The steadily falling cost of technology means that every year the number of functions that could be included in a device grows.
"At present, navigation may make sense for mobile handsets. The addition of GPS technology and mapping software, could allow handset vendors to raise prices. Or at least slow price declines. It may also help individual vendors gain market share. In addition, manufacturers are also considering how location functionality could provide additional revenue streams, on top of handset sales."
But though GPS may come to be seen as a nice thing to have on phones, will there be associated revenue streams for mobile operators. Lee is not so sure.
"While mobile GPS may be good news for vendors, operators may find it harder to monetize this technology. Operators should try to understand how the technology could be used to enhance the value of other existing services, such as messaging, or serve as the platform for entirely new ones, such as social networking or treasure hunts," Lee says.
"While the combination of GPS and mobile phones should ultimately be a success, the industry cannot afford to overlook several critical differences between the use of satellite navigation in vehicles and that by pedestrians. A critical requirement of satellite navigation is the line of sight between the satellites above and the device on the ground. Without it, no positioning information can be received.
"In a car, this is relatively easy. GPS systems are usually mounted on dashboards, or integrated into cars and linked to an external antenna. In contrast, mobile phones used by pedestrians are often kept in pockets or hip holsters. In either case, line of sight is far harder. Furthermore, with pavements often in the shadow of tall buildings, pedestrians may struggle to get a signal even with the device uncovered.
"Thus while a growing number of GPS-enabled mobile phones may be shipped and sold, aside from the initial novelty, they may not be used very often. This may mean additional costs for the manufacturers and operators, but little added value."
But there is one company that thinks it has the answer to this in-building issue. This company is using WiFi to provide location. How? Well, it keeps a dynamic database of all the WiFi hotspots and access points it can lay its hands on, by conducting drive-through surveys. It then gives each access point a precise location. So when a user turns his iPhone, or any other WiFi enabled device on, it is able to provide a location based on the WiFi zone it is in. The company is called Skyhook, and its ceo Ted Morgan says he thinks WiFi location can provide the missing link in the location world.
Skyhook has just launched in Europe. The launch includes a massive coverage expansion throughout the UK and Europe and the establishment of sales and operational offices in the region. Skyhook has already mapped over 16 million Wi-Fi access points in Europe, and now provides coverage to over 130 million people in Europe. Skyhook's fleet of 200 European data collection specialists has driven over 750,000 kilometers to date and continues to expand coverage every day. "Skyhook's European expansion is an important step towards our goal of delivering consumer-ready location across any environment, indoors or outside, in rural areas or downtown, in Berlin or Boston" said Ted Morgan, CEO of Skyhook Wireless.European application providers are taking advantage of Skyhook's European expansion. UK-based BuddyPing and Rummble and Dublin-based Locle are integrating Skyhook's software into their applications. By working with Skyhook's positioning system, these cutting-edge mobile social networking and search applications are responding to the consumer demand for fast, accurate, and reliable location determination in all environments.