In search of LBS

22 Feb 2008

Few mobile applications have been more highly anticipated, and so slow in coming, than location-based services. Or so it seems. LBS has been around for years in various forms, from early implementations like fleet tracking to recent emerging apps like in-car navigation and personal navigation devices (PNDs) from companies like Garmin, Navman, Trimble, Magellan, and TomTom.

Yet LBS has remained something of a niche - fleet tracking is chiefly a hit with vertical industries, while in-car navigation's heavy price tag has limited its appeal to the luxury car market. PNDs have been faring better as prices go down, and are partially responsible for the recent buzz over LBS' pending surge. In-Stat, for example, says there will be 56 million portable navigation devices in service by 2011, compared to 14 million in 2006.

However, that includes mobile phones fitted with GPS chips, and here's where the real excitement begins, because the mobile space is widely seen as LBS' ticket to the mass market bonanza. Again, this isn't new. Carriers in Japan and Korea have been offering A-GPS-based location services for years, while the US FCC's E911 mandate in 1999 (under which cellcos needed to support delivery of location information to emergency services operators) set the stage for the launch of commercial LBS services leveraging the same capabilities, which began in earnest in 2004 with Nextel's TeleNav service.

Four years later, however, mobile LBS is still in first gear even in markets like the US where it took a government mandate to convince cellcos to invest in the technology to enable their networks to support location-based services, and only now starting to realize its potential. There's a plethora of reasons for this, but the basic issue has been the lack of market incentive which cellcos preferred to be supplied by an ecosystem ready and able to make LBS a compelling service that users would actually want.

Which brings us back to the current buzz over LBS. It's just now coming out of the other end of the usual cycle that new mobile apps go through - hype, disappointment, reality check, nascent traction and steady growth. Telephia reports that revenue from the mobile LBS applications market tripled in the first three quarters of 2007, with no signs of slowing anytime soon. The digital mapping sector's two biggest players - Navteq and TeleAtlas - were snatched up last year by Nokia and TomTom, respectively, setting up an epic battle between handsets and PNDs for the hearts and minds of consumers. And many of the elements of the LBS ecosystem are finally poised to fall into place.

"The technology, handsets and high bandwidth networks now exist to deliver the accuracy to ensure the best possible user experience," says Robert Morrison, senior VP of market and business development at LBS technology firm TruePosition.

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