Location may, in time, come to be used as just another core element of communication. But we're not there yet, hears Keith Dyer
For a long time, operators and location technology suppliers struggled with how to provide location services to users. First there were technical issues, as operators grappled with a range of solutions, from network-based positioning technology to GPS and then A-GPS. Alongside that, there was always the pressing matter of what would actually drive take up of location based services.
But now, finally, with GPS at a cheap enough price point in handsets, and with hybrid positioning technologies (Cell-ID, WLAN location, plus GPS) providing an acceptable user experience at an acceptable price point for operators, we are at a point where location is proving to be a revenue generator in the mobile industry.
For instance, CoPilot Live is the top-grossing application on Apple's AppStore in the UK, and is currently retaining top position amongst the paid navigation apps on the Apple App Store. And it's not as if it's a cheap item. CoPilot Live for iPhone is available as UK + Ireland version for just £25.99 or a Pan-Europe version for £59.99. Single region versions are also available for most European countries for €33.99. Other mobile navigation applications have also met with favour, as well as launches into the market from Google and Nokia. Alongside all this, we have seen the operators themselves launch navigation and mapping services. O2 has launched with Telmap. while Vodafone launched its service via technology acquired when it bought Wayfinder.
Navigation apps are also being integrated into the overall user experience of the phone, rather than being a stand-alone function. The makers of CoPilot Live have just released an update to their app that includes iPod controls within the application. This means that users can now control their iPod through the CoPilot Live application, making the application more friendly to the user, as s/he doesn't have to close down an app in order to listen to music.
And now that the technology exists to provide reliable location awareness, location has been repositioned as an enabler rather than a service in its own right, and analyst projections about revenues and service uptake are starting to flow even more freely. There is even the term LES – Location Enabled Services – starting to replace LBS – Location Based Services.
ABI Research predicts that LES revenues will grow at 156% annually from $1.7bn in 2008 to $2.6bn in 2009, going beyond a huge $14 bllion by 2014. iSuppli predicts that dedicated PND devices from will be overtaken in volume by mobile navigation applications over the next five years, with 128 PND million units in the market by 2014, compared to 305 million users of location services on mobile phones. Figures from Gartnerare not too far off ABI's numbers, with the analyst predicting spend on LES of $12.7 billion by 2013.
Until now, though, the success of location has been based, as we have seen, on mapping and navigation services. The industry is now beginning to ask, what if location became just another commodity of the communications experience, to be added into the mix whenever it might be useful to the user?
Skyhook Wireless, which provides the location platform to Apple, claims there are over 3,000 location-aware apps on the iPhone App Store. There are examples of location being added to sports sites, to voting applications, to shopping and travel information applications.
Daphna Steinmetz, Vice President of Comverse Innovations, says that as well as web-based services, operators can use their own network knowledge to design some services.
"The web has created many opportunities for the telecom industry to offer more personalised and context-aware services for mobile users wherever they are. In conjunction with new networks and powerful devices, for many the mobile has become the personal PDA, computer, address book, camera and music player to name just a few functions. What's needed now is to find services which are useful to people and in individual ways pertaining to their needs, intentions and behaviour," she says.
"Network knowledge about users can be highly useful for example to point out when they're travelling and in a different timezone to the caller. When being connected to someone who's in Hong Kong, instead of being put through directly, this service can inform you of the time out there and offer you the option of sending a message instead of calling and potentially waking them up for example. This is obviously very useful and relies on geographical knowledge of the user's whereabouts.
"Another service is using both your location and past communication habits to provide the most relevant web search results. For example, a businessman and a teenager who are both searching for ‘Paris Hilton' might get results for a hotel and a Hollywood icon. Using previous behavioural and location knowledge, say, if the businessman is currently in France, they can be sure to receive only relevant search results."
Chris Lennartz, VP of Product Marketing at Airwide Solutions, says that it might not even be that operators need to leverage GPS on smartphones when considering effective location based services.
"The operator could harness its own intelligence and data capabilities to enable the majority of users with a standard handset to enjoy the benefits of location enhancements too," he says. "For example," Lennartz points out, "When you use Google on your mobile, the operator can send your location with your query to Google so your search results become more relevant. He can even do that by inserting your location in a search SMS to Google, whereby the user gets a WAP Push message back with only the most relevant results. This greatly enhances the user experience as they don't need to scroll through pages and pages of possible relevant results – they receive the most relevant results first time."
Lezzartz also considers that there could be advancements in location-enhanced advertising, saying that when ads are pushed to a user that are based on his location, the relevance of those ads can be greatly enhanced, potentially increasing click-throughs. He also highlights location-enhanced social networking and security services.
One company that has taken location and added it to a service that many might not think is a natural fit to location is Shazam – which as you will probably know operates a music tagging, identification and sales service for mobile. Shazam Chief Operating Officer Chee Wong, says that adding location to the application has enabled his company to develop a richer experience.
Using location APIs provided by Apple for the iPhone, Shazam was able to build a tool that, amongst other things, lets users see where they were when they tagged a certain song. If they are sharing information, then others can also see those tags, or a user can see a friend's tags. It's a free application to the user right now, designed to boost usage by adding a visual location-based element to the service. But Wong says that Shazam can see a business model in which gig promoters can use the known location of a user to push information about relevant gigs to them.
Wong says that the integration of the location API and technology into the application was relatively straightforward, and need not be a barrier to other application developers.
"The key is to keep it really simple and to be very clear about what it is you want to achieve"
Terry Heath, Chairman of Seren, which designs user experiences for mobile operators and handset vendors, says that his business is seeing increased requests for how to integrate location into the mobile experience.
"We've been working in this area for 10 years, and yet the operators have not really managed to launch anything," he says. "Now the enablers are more open and available and some exciting ideas are emerging. Entrepreneurs now have a route to market.
"And one of the chief drivers of that is that location is one of the chief things that links the digital lifestyle back to the real world. If you take social networking as an example, all of a sudden there is a layer available that wasn't available before."
And certainly we are seeing a boom in social networks sites, and providers, using location as a driver. One of the most high profile in recent months has been FourSquare, which has come up with a game-based model in which smartphone users can use to gain points by visiting locations. But there are others, too, such as BrightKite and Whrrl. Gypsii has taken a lead in location mobile social networking in some Asian markets, and is targeting growth in Europe.
Gypsii, a social networking service headquartered in the Netherlands, is also attempting to put the mobile user at the heart of social networking.
Gypsii's service, allows users to locate friends or other people with similar interests using the service, but also to leave information about places and locations for others to see. And it's not just a standalone experience, the platform integrates Facebook and Twitter, allowing mobile users to update profiles through the Gypsii portal.
Shane Lennon, executive vice president, Gypsii, says that by working with a company like Gypsii, mobile operators could share in the benefits, rather than trying build their own services. Operators are more likely to gain benefits from mobile social networking by working with Gypsii as the core platform provider, and then use the billing relationship to provide additional services. He doubts that operators can, on their own, build an advertising case around location services. Instead, he counsels that operators act as a re-packager, or editor, of applications, sharing in revenue with the application providers.
And here's the rub. From Shazam to Gypsii, and all the other location enabled service providers, one of the key benefits of adding location to applications is that they envisage being able to add advertising to their revenue stream. With a proliferation of app stores, competition is only to get more intense. Location can add to the user experience, but can it add to revenues?
Rusell Buckley, Vice President of Global Alliances of ad network AdMob, is sceptical. Although his company is seeing a huge increase in ad requests, driven largely by the iPhone, he thinks that advertisers themselves just aren't ready for location-based advertising.
One issue is scale, in that using location in advertising requires a network to have a relevant advert to serve to a user. "How do you get the mom and pop businesses to advertise in that way?" he asks. And if it is larger companies that are to use someone's location to push them an ad, will it really be relevant to that user, or just a best effort?
Buckley says that in his opinion location based advertising being able to support appplications is really some way off.
So, although mobile location has moved from technical headaches, to a successful navigation experience, it seems that there is still some way to go before we see location being used to enable and enrich the user experience in other applications.
And this is chiefly because, although it is easy enough to access Apple's location APIs for the iPhone, outside of that operators have still a long way to go in terms of defining their business model.
Vodafone, for example, hopes to start selling adverts around its mapping and location service next year. Yet, to take just one example, what is Vodafone's business model for exploiting the use of location in social networking?
It's Vodafone 360 launch was rich in the promotion of its connected address book, integration of Facebook and Twitter to the communications experience. And yet the actual navigation and location experience 360 provides is, I'm afraid to say, not great.
And although SkyHook claims those 3,000 location-enabled apps on Apple's AppStore, what exists outside of that shop for the mainstream mobile user?
This is not to say that it can't happen, just to warn that once again, when someone tells you location will drive revenues, it is still best to ask, "How?"