Location-based Services in the US

I started working on location-based services back in 1999. We identified different categories of location services, serving different user needs. It isn't all about driving directions and local search, nor is it all about high precision data. Useful services can be provide with a number of technologies, though GPS variants are mighty useful.

Back when I started, I railed against the pricing models, but agreed with the concerns about privacy. I certainly agreed that getting 911 calls located (meeting government mandate) was the top priority, but there were so many business opportunities.

Among other ideas, we identified:

• maps, directions
• traffic monitoring & dynamic re-routing
• very local weather
• "fencing" (providing an area outside of which the tracked phone should not venture)
• tracking (useful for many businesses)
• friend finding
• local search

The problems surrounded privacy and cost. Paying for each fetch of location data quickly makes any tracking application infeasible. Privacy is somewhat illusory; in the past few years we've had a number of reports of government agencies tracking traffic speed via mobile phone signal, using the mobile to spy on an individual, and lives saved because somebody and the operator could track an individual.

So the carriers left all the potential revenues from the above services on the table. Some operators steadfastly avoided implementing location services as much as possible, lobbying the government to delay requirements.

Sprint, however, has started building their LBS service offering, and now have a compelling mix. Most recently, they announced dynamic directions and maps, with local search built in. The screen shots from the service look very nice, and the pricing works for folks who only occasionally need help with directions: $2.99 for 24 hours use. If that helps me navigate on a vacation and get the most out of it, I will definitely pay that money. This comes on top of other services such as the apartment finder ($2.99/month) and Family Locator.

What is especially telling about the state of LBS in the US is found on the support devices portion of TeleNav's web site. Take a look at each of the top 4 carrier's supported devices:

• Cingular: 27 devices, only the Motorolas are mass-market phones, 22 of the devices need an external GPS receiver
• Verizon: 4 devices, all smart phones (i.e., a named operating system like Symbian, Palm, Windows Mobile), all requiring a external GPS receiver
• T-Mobile: 1 Blackberry requiring an external receiver
• Sprint: 26 devices, a healthy mix of mass-market and smart phones, only 4 of which require external receivers

The Sprint numbers don't include Nextel phones, all of which are made by Motorola and all of which have built-in location.

Based on this mix, it looks like TeleNav is using, among other technologies, Java ME MIDP2 (else it wouldn't work on my Sanyo MM7500). It also looks like some of the carriers are blocking location access (not implementing JSR 179 on their Java devices) or blocking location entirely, else the devices would likely be supported.

Given all of the above, I find it interesting to listen to my European counterparts, who are discovering all of the above for the first time. Business models, technology concerns, carrier roles. Perhaps this is an example of a case where the US is a little ahead of Europe? Due to the government?

We look very positively at the potential for location services in the Old World, and we think GPS is the only way to successfully make independent services, as all other location methods are controlled by operators, and are also practically useless precision-wise. Hence with GPS it’s easy to make useful location services that use the operators’ networks as plumbing. The way it should be.

The main drawback with GPS is of course that there are no phones supporting it, relatively speaking. There I’m quite sure USA is ahead of Europe. From a pure bottom line perspective it’s therefor probably best to start with B2B or B2B2C over here, as companies can afford to buy new phones and pay for the services. B2C location services will rely on advertizing and eventually being acquired (well, at least hope to), and I’m sure many will try that as well, but how get GPS phones in the hands of consumers quickly?

All the service types you mention are commercially interesting in Europe.