LBS: Lots of Road Left

CTIA SPECIAL EDITION - APRIL 3, 2008

Last year was a big one for location-based services (LBS),
with giant vendors pursuing game-changing acquisitions and operators touting
their navigation and friend-finder services. Where is LBS headed now?

It’s been a long haul for the commercial location-based services (LBS) space. Back when the FCC mandated E-911 for emergency response purposes, vendors talked about all that revenue carriers could reap from commercial LBS services. The theory was once carriers were E-911 ready, they could offer non-emergency LBS services and bring in additional revenue.

The rush for commercial LBS didn’t come as fast as expected. Carriers took their time testing and proving E-911 services. They mulled over and refined policies around privacy. They analyzed solutions from various vendors and tried to figure out what their customers wanted. Throughout it all, the industry never forgot the old “find-the-nearest-Starbucks” scenario, even though Starbucks outlets popped up on nearly every street corner.

Today, the industry is waiting to see how European regulators handle Nokia’s bid to buy mapping data provider Navteq for $8.1 billion and TomTom’s plan to acquire Tele Atlas for $2.8 billion. Meanwhile, U.S. carriers or MVNOs are offering LBS services to their customers, from Boost Mobile’s “Where U At?” friend finder powered by loopt to Alltel Wireless’ Axcess Family Finder developed by WaveMarket. AT&T offers TeleNav services, and Verizon Wireless offers the VZ Navigator, powered by Networks In Motion (NIM). Sprint recently was recognized by Frost & Sullivan for its LBS business solutions and Sprint Navigation, powered by TeleNav.

WHERE TO GO?
At this stage of the game, what’s next? Vendors say it’s still early days for LBS, and they’re just getting started. Subscriber penetration rates for navigation and other services are still low enough to leave plenty of room for growth. Existing solutions are being improved upon. The emergence of more GSM-based handsets with GPS presents further opportunities.

NIM led the LBS industry in the United States with 57% share of revenue from the top four U.S. carriers, up from 53% in the third quarter, according to Nielsen Mobile’s fourth-quarter Mobile Application Report. NIM obtained 33% share of carrier revenue from all mobile data applications, leading other app publishers, including MySpace Mobile, XM Satellite Radio and other GPS navigation software providers, such as TeleNav, MapQuest Mobile and Garmin Mobile. NIM’s subscription costs vary by carrier, but the typical fee is $9.99 per month or $2.99 per day.

This spring, NIM is touting its new AtlasBook Navigator, a software platform that enables people to bypass traffic jams, explore new sights, plan social activities or just find their way home using a GPS-enabled phone. “This is an update to our core technology that’s running all of our services,” says Steve Andler, vice president of marketing at NIM.

AtlasBook Navigator includes the points of interest and turn-by-turn directions with voice guidance found in its previous software platform, but it also includes real-time traffic avoidance, a 3D perspective view, gas prices, weather and a mobile activity planner.

Instead of automatically rerouting the user when there’s congestion ahead, the NIM system will recalculate the current route and the detour route and provide the distance and time for both so the user can choose. Its patent-pending technology pushes new information out to people rather than pulling every 10 minutes or so. That way, users get immediate notification of what’s ahead.

Andler doesn’t see NIM going head-to-head with Google maps because NIM uses real-time satellite tracking and notifies the user of upcoming turns and/or reroutes the user. It’s a different class of products versus just giving directions or presenting a map of a location, he says.

Lorello: Another
banner year for LBS.

MULTIROUTE STRATEGY
TeleCommunications Systems (TCS) is sort of a jack-of-all trades when it comes to LBS. It recently was recognized by Frost & Sullivan as the only company providing the full gamut of LBS solutions, including infrastructure, location gateway, middleware platform, geospatial and application server, as well as content and applications. “Our company shows up over and over again” in various sectors of the industry, says Tim Lorrello, senior vice president and chief marketing officer at TCS.

TCS is introducing the latest version of its Xypoint Location Platform, in addition to enhancements to its traffic applications. A “My Commute” tool allows drivers to create and save multiple, frequently used routes such as to and from home and work, sporting events or other locations. Other personalization features include quick access to last-view metro areas or regions, panning and zooming to assess traffic speed flow and incident information and handset coverage through support of both WAP 1.0 and 2.0 for mobile browsers.

In addition to the new personalization features, TCS Traffic now supports mobile advertising with Mobile Marketing Association-compliant advertising formats. By providing customers with advertising-supported traffic information, carriers can offer value-added TCS Traffic free of charge, the company says. TCS Traffic with advertising support is currently deployed with a large, unnamed North American wireless operator.

TCS also has enhanced its SMS Center solution for carriers to deliver next-generation, location-based messaging services. New features include SMS banners, LBS support and enhanced anti-spam capability. TCS long has been a proponent of privacy protection for wireless subscribers, and with the growth of mobile advertising comes the potential increase of spam. Subscribers who don’t want to receive ads will have the ability to block or opt out from receiving future ads. The subscriber can forward the unwanted ad or message to an SMS short code; the TCS SMSC then blocks any future messages from that source to that specific handset.

Of course, WiMAX is part of the mix as well. During CTIA Wireless 2008, TCS is demonstrating precise location fixes over a WiMAX network using the Secure User Plane for Location (SUPL) Assisted GPS technology in the TCS Xypoint Location Platform. The demo will be running live on a commercially deployed WiMAX network in the Pacific Northwest.

“There’s so much room left to go on this,” Lorello says. “We’re just in the early stages.” NIM’s Andler echoes that sentiment. “If things go the way we’d like, 2008 will be another banner year for location services,” he says.

Finding Your Phone in a Hurry

GPS can come in handy in more ways than one. Say, like when you’re a busy 14-year-old and you can’t find your phone. And you don’t really want to tell Mom and Dad that you lost it – again.

That’s just one reason kajeet, which serves teens, tweens and their parents, is launching its GPS Phone Locator product, powered by WaveMarket, to help parents and their kids locate their phones using the Web.

Over the course of about two years, kajeet talked with kids and their parents to find out what they want in a cell phone service, and besides no contracts, they wanted the ability to locate their kajeet phones. For what purpose? “It’s a mixture of things,” says Daniel Neal, kajeet’s founder and CEO, from the kid who loses his phone to the mother who wants to know where the phone is located at a given time of the day.

Kajeet is offering the first three months of the GPS Phone Locator service for free, to both new and existing customers, so customers can determine whether it’s useful. If they like it, customers can pay $9.99 a month after the trial period.

Kajeet, which uses Sprint’s network, offers handsets from manufacturers such as LG, Nokia, Samsung and Sanyo. The phones, which range from $39.99 to $99.99, don’t look like “kid” phones, either. “What kids want is a real handset,” Neal says. “They don’t want some special ‘kid-ified’ handset.”

The company doesn’t reveal how many subscribers it has since it launched about a year ago. Its phones are sold at outlets such as Best Buy and Target. Besides the phone locator service, the company offers Google maps for navigation.

Neal acknowledges that in some ways, kajeet competes with family plans offered by nationwide carriers. “You might say that, but family plans are also used for aunts and uncles,” grandparents and other family members, so they’re not designed just for kids. “We believe the family plan was designed for Wall Street… Our plans are designed for Main Street,” he says, noting the no-contract and “no-hidden-fee” promise of kajeet.

Kajeet was formed after three dads got together to figure out how best to make technology, kids and parents work together. The company name is an anagram of the first letters of the names of the company’s founders’ children. Neal has a 9-year-old daughter and a 12-year-old son, and even though they’re kajeet customers, they’re not the only kids with whom he consults. Kajeet has ongoing conversations with its target groups to find out what a wide cross-section of the market wants, he explains.

Parents and their kids likely will use the phone locator service for various things; kajeet won’t know exactly how they use it until after it’s launched and in the market for some time. “I think people are going to experiment with it,” he says.