Following three days in San Francisco, spent attending
three different conferences that focused on location-based services
(LBS), I have come to the conclusion that location will soon be a part
of every mobile and cellular service we use, and we will have one
personal device that enables all such services. Without a doubt, LBS
has "risen from the ashes" of the earlier part of this decade, which
saw the decline of the telecommunications industry after 9/11. There’s
never been a time when I’ve heard as many tangible enterprise and
consumer values expressed in solid business cases using location to
create profit and better quality of life. From all three events, NAVTEQ
Connections, SiRF Location
2.0 Summit and CTIA's Wireless
and Entertainment Conference, came predictions that location
technology, for use in both enterprise and consumer mobile
applications, will be embedded and standard in every device delivered
to the market. From operating systems to handsets, location as a key
contextual element will be essential. As Darren Koenig, LBS director
for Tele Atlas, stated: "Location is the ultimate context." Finally,
all parts of the mobile technology ecosystem are realizing the same
thing.
Wrapping up his SiRF Location 2.0 Summit, Kanwar Chadha, founder and chief marketing officer for the company, said: "We should look at location as an integral part of everything we do. We are looking at location significantly beyond navigation. We'll see navigation as not only where you want to go but help to decide what you want to do...Android, iPhone, Nokia - all these platforms are using location as an inherent element. All of a sudden we have gone from having no APIs [application programming interfaces] to many APIs. Hopefully more standardization will come."
And therein lie some of the challenges. Both cellular carriers and platform device manufacturers are competing to dominate the location application pipeline. Will Verizon and AT&T take the lead in providing useful and "fun" applications, or will Nokia, Samsung, and Apple bypass them by offering platforms and chipsets that use Wi-Fi, GPS or cellular networks as optional location determination methods? In addition, these same manufacturers can offer APIs, thereby giving software developers some freedom in choosing how to artfully create LBS applications.
Take, for example, XOHM, Sprint Nextel's next generation 3G WiMAX network. In his opening keynote at the SiRF Summit, Barry West, president of the XOHM business unit of Sprint Nextel and chief architect in creating the iDEN wireless technology platform - more commonly referred to as "push-to-talk" - posed the question, "Why another technology?" West said, "XOHM WiMAX will start with location as a component." Sprint Nextel is anticipating that location data will be downloaded in ever-increasing data packets, thus necessitating better and faster broadband networks. He explained that all the growth from wireless users is in data usage and there is downward pressure on voice over wireline. In short, the Internet on your mobile handset is about to get a power boost, and location-based content (maps, points of interest, etc.) is increasing these data streams.
Background Market Statistics
How did we reach the point where location is now considered essential, whereas previously neither carriers nor handset manufacturers could figure out what to do with it? The explosion of the personal navigation device (PND) market is at the center of this maelstrom. Jeff Mize, executive vice president of NAVTEQ, provided these numbers: In North American, there will be 20 million PND units sold in 2008; that's an 80% growth over last year. Sixty percent of those 20 million units will be sold for less than $200; 90% from only four manufacturers - Garmin and TomTom have the largest market share. The distribution network for these devices is now very diverse. There are over 35,000 retail outlets at which you can buy PNDs. We can expect to see aggressive pricing of these units during the coming holiday season and an introduction of private label retailer brands, plus a "buzz" around connected devices. Bottom line: PNDs and mobile phones are at war. Convergence is coming. Commodity pricing is now in place.
Some additional statistics on the market penetration of LBS:
The Converged Device
Converged devices are not new and more are coming on the market every day. If you are a BlackBerry user, for example, you may suspect that it already controls much of your life as it is. If you listen to Jim Balsillie, co-CEO of Research in Motion (RIM), makers of the device, you might concur that "Your Life on Blackberry," RIM's tagline, is your reality. RIM is prepared to dominate the converged device market, those mobile handsets that offer not just voice, but Internet access, email, music, video, TV, social networking and of course, location services. "The cell phone market for the last five years has been flat but the smartphone market is not," said Balsillie. "Total shipments of smartphones went from 3.6 million in 2005 to 35.1 in 2008. RIM has 54% market share in smartphones. Apple has 7%. Why are smartphones growing? It is because of the payloads...[these] four: paging, wireless data, broadcast radio and TV, and cellular voice...a convergence of payloads. If I want these four payloads, can I have a device to do that?" So, the catalyst for RIM was the ability to carry these four payloads, as well as an expansion of the existing device-messaging payloads to include paging, short messaging services (SMS), email, instant messaging (IM), social networking, blogs and wikis.
RIM wants to offer diversity in messaging payloads, a variety based on context and situation. The company wants your eyeballs on its device, regardless of your life situation. It doesn't want to be thought of as only a business smartphone...it wants the handset to be your "life management and entertainment" device. I'd call it your "LIME." Balsillie explains it this way: "There is a convergence of four screens - home Internet (computer), TV, cell phone and home phone. This is all doable today. This is why I'm so bullish on the growth. People wanted it unified at the presentation layer." Would you like to access and control your TiVo from your BlackBerry? Perhaps schedule recordings and never miss a show? And coming soon - route and synchronize TV content to your mobile and put TV shows on your BlackBerry. Frankly, I prefer a big screen TV, but others like the 2.5 inch version, especially on the go.
Enterprise Applications
The most surprising element of all three shows was the prominence of enterprise applications. CTIA had more sessions on LBS, in general, than I remembered from the past. Cisco Systems' Scott Puopolo discussed how his company would support network level collaboration. Dr. H. P. Jin of TeleNav openly discussed that UPS and FEDEX were users of its system. Balsillie touted BlackBerry Enterprise Solutions. And the SiRF Summit dedicated a full session to "using location to beat the economy." How prescient!
I also had a lengthy conversation with Joe Astroth, vice president of LBS at Autodesk. Autodesk's LocationLogic is serving as the back end location server for Verizon's VZ Navigator and Sprint Nextel Mobile Locator Service. Astroth indicated that the carriers are somewhat conservative in their approach but fully understand the business model to gain new users of location services. Because LocationLogic is capable of supporting authentication and security, it becomes feasible to support scalable enterprise applications.
Three enterprise applications were presented as "fast pitch" presentations at the SiRF Summit by relative newcomers to the location marketplace. The "fast pitch" presentations were delivered as three-minute "elevator" pitches to the SiRF audience. Afterwards, attendees voted via text message for their favorite application. The enterprise applications all offered unique worker productivity tools.
LuckyCal, by Lucky Cal Inc. is an application to help "predict presence" and offer the user options for what he might want to do. The application allows the user to input his intended location and do a look up for events that might be of interest to him. Applied to business or enterprise applications, it will look up the set of people with whom you might want to talk while in a specific location. If using LinkedIn, Plaxo or Microsoft Outlook, the objective is to alert the user to the presence of possible sales contacts and to sell more while traveling less.
Pacific DataVision offers SkyMail, which lets mobile field force workers document events wirelessly in a voice-to-email application, in real-time. The user speaks the message and SkyMail will email the message with a location stamp to dispatchers. Dispatchers can verify time and location that a field representative made a service call to document service level agreements.
ProxPro claims that you will "never be late again" with PROMPT. PROMPT compares your current location to the time and location of your next appointment. It displays the fastest route to avoid traffic (it links to real-time updates) and tells you exactly when to leave. It is a "situation aware" application and is fused to the calendar on your mobile device. Information is "pushed" to the user. It is currently available only on BlackBerry. The benefits of PROMPT might be lower fuel costs and increased service levels.
In this series of presentations at the SiRF Summit, ProxPro came away as the winner of the "people's choice" award.
Sobering Summary
Let us, however, be cautious about over-hyping "location" again. While there is a flurry of activity, new applications and the business models to bring them to market, not everything is going to fall into place without some market shakedown. Magnus Nilsson, CEO of Wayfinder Systems, stated, "It is early days and we are technology driven. We're looking for smart technology that is easy to use. My biggest job is to work with manufacturers to take away features." That's an interesting statement and one drawn from years of watching LBS, which is just now developing applications that are not "too much, too soon." Nilsson noted that navigation applications are still only used an average of once per week.
Nor will the heavy hitters of the Internet - Microsoft and Google - let the mobile location market slip by without some input. Rich Miner, group manager for Google's Mobile Platform, was asked if Android (Google's open source operating system) and Chrome (Google's new Internet browser) will be the platform for "all things and all places." Miner said, "Android is a platform for a small memory footprint, and could find its way into consumer devices. Its rich set of services will be made available as open source under Apache licenses." How friendly is Android to location? "[Location] is important to Android and Google; anytime Google returns a search we want it to be context relevant and location is one of those contexts," said Miner. "Carriers have done a poor job for developers to build applications... [They] have missed an opportunity to be a value-added pipe...People will bypass them and just use GPS."
So, the stage is set for some interesting battles: Device manufacturers, Internet players, cellular carriers and application developers all want a piece of the LBS market. As we discussed in a recent podcast, the time is certainly coming when we will rely on a single converged device for voice, data and Internet. The "four screens" to which Balsillie referred, occupying one device, presents an interesting vision for the future of mobile communications and entertainment. And if location becomes the embedded and standard service that we now assume it will be in most all mobile devices, a "push to locate" function will be at your fingertips for far more than just navigation.
Wrapping up his SiRF Location 2.0 Summit, Kanwar Chadha, founder and chief marketing officer for the company, said: "We should look at location as an integral part of everything we do. We are looking at location significantly beyond navigation. We'll see navigation as not only where you want to go but help to decide what you want to do...Android, iPhone, Nokia - all these platforms are using location as an inherent element. All of a sudden we have gone from having no APIs [application programming interfaces] to many APIs. Hopefully more standardization will come."
And therein lie some of the challenges. Both cellular carriers and platform device manufacturers are competing to dominate the location application pipeline. Will Verizon and AT&T take the lead in providing useful and "fun" applications, or will Nokia, Samsung, and Apple bypass them by offering platforms and chipsets that use Wi-Fi, GPS or cellular networks as optional location determination methods? In addition, these same manufacturers can offer APIs, thereby giving software developers some freedom in choosing how to artfully create LBS applications.
Take, for example, XOHM, Sprint Nextel's next generation 3G WiMAX network. In his opening keynote at the SiRF Summit, Barry West, president of the XOHM business unit of Sprint Nextel and chief architect in creating the iDEN wireless technology platform - more commonly referred to as "push-to-talk" - posed the question, "Why another technology?" West said, "XOHM WiMAX will start with location as a component." Sprint Nextel is anticipating that location data will be downloaded in ever-increasing data packets, thus necessitating better and faster broadband networks. He explained that all the growth from wireless users is in data usage and there is downward pressure on voice over wireline. In short, the Internet on your mobile handset is about to get a power boost, and location-based content (maps, points of interest, etc.) is increasing these data streams.
Background Market Statistics
How did we reach the point where location is now considered essential, whereas previously neither carriers nor handset manufacturers could figure out what to do with it? The explosion of the personal navigation device (PND) market is at the center of this maelstrom. Jeff Mize, executive vice president of NAVTEQ, provided these numbers: In North American, there will be 20 million PND units sold in 2008; that's an 80% growth over last year. Sixty percent of those 20 million units will be sold for less than $200; 90% from only four manufacturers - Garmin and TomTom have the largest market share. The distribution network for these devices is now very diverse. There are over 35,000 retail outlets at which you can buy PNDs. We can expect to see aggressive pricing of these units during the coming holiday season and an introduction of private label retailer brands, plus a "buzz" around connected devices. Bottom line: PNDs and mobile phones are at war. Convergence is coming. Commodity pricing is now in place.
Some additional statistics on the market penetration of LBS:
- 14% of new cars come with installed navigation systems
- 13% of all cars have PNDs in use
- 2% of mobile phones have navigation capabilities
- 0% of portable media players have navigation capabilities
- 0% of portable computers have navigation capabilities
The Converged Device
Converged devices are not new and more are coming on the market every day. If you are a BlackBerry user, for example, you may suspect that it already controls much of your life as it is. If you listen to Jim Balsillie, co-CEO of Research in Motion (RIM), makers of the device, you might concur that "Your Life on Blackberry," RIM's tagline, is your reality. RIM is prepared to dominate the converged device market, those mobile handsets that offer not just voice, but Internet access, email, music, video, TV, social networking and of course, location services. "The cell phone market for the last five years has been flat but the smartphone market is not," said Balsillie. "Total shipments of smartphones went from 3.6 million in 2005 to 35.1 in 2008. RIM has 54% market share in smartphones. Apple has 7%. Why are smartphones growing? It is because of the payloads...[these] four: paging, wireless data, broadcast radio and TV, and cellular voice...a convergence of payloads. If I want these four payloads, can I have a device to do that?" So, the catalyst for RIM was the ability to carry these four payloads, as well as an expansion of the existing device-messaging payloads to include paging, short messaging services (SMS), email, instant messaging (IM), social networking, blogs and wikis.
RIM wants to offer diversity in messaging payloads, a variety based on context and situation. The company wants your eyeballs on its device, regardless of your life situation. It doesn't want to be thought of as only a business smartphone...it wants the handset to be your "life management and entertainment" device. I'd call it your "LIME." Balsillie explains it this way: "There is a convergence of four screens - home Internet (computer), TV, cell phone and home phone. This is all doable today. This is why I'm so bullish on the growth. People wanted it unified at the presentation layer." Would you like to access and control your TiVo from your BlackBerry? Perhaps schedule recordings and never miss a show? And coming soon - route and synchronize TV content to your mobile and put TV shows on your BlackBerry. Frankly, I prefer a big screen TV, but others like the 2.5 inch version, especially on the go.
Enterprise Applications
The most surprising element of all three shows was the prominence of enterprise applications. CTIA had more sessions on LBS, in general, than I remembered from the past. Cisco Systems' Scott Puopolo discussed how his company would support network level collaboration. Dr. H. P. Jin of TeleNav openly discussed that UPS and FEDEX were users of its system. Balsillie touted BlackBerry Enterprise Solutions. And the SiRF Summit dedicated a full session to "using location to beat the economy." How prescient!
I also had a lengthy conversation with Joe Astroth, vice president of LBS at Autodesk. Autodesk's LocationLogic is serving as the back end location server for Verizon's VZ Navigator and Sprint Nextel Mobile Locator Service. Astroth indicated that the carriers are somewhat conservative in their approach but fully understand the business model to gain new users of location services. Because LocationLogic is capable of supporting authentication and security, it becomes feasible to support scalable enterprise applications.
Three enterprise applications were presented as "fast pitch" presentations at the SiRF Summit by relative newcomers to the location marketplace. The "fast pitch" presentations were delivered as three-minute "elevator" pitches to the SiRF audience. Afterwards, attendees voted via text message for their favorite application. The enterprise applications all offered unique worker productivity tools.
LuckyCal, by Lucky Cal Inc. is an application to help "predict presence" and offer the user options for what he might want to do. The application allows the user to input his intended location and do a look up for events that might be of interest to him. Applied to business or enterprise applications, it will look up the set of people with whom you might want to talk while in a specific location. If using LinkedIn, Plaxo or Microsoft Outlook, the objective is to alert the user to the presence of possible sales contacts and to sell more while traveling less.
Pacific DataVision offers SkyMail, which lets mobile field force workers document events wirelessly in a voice-to-email application, in real-time. The user speaks the message and SkyMail will email the message with a location stamp to dispatchers. Dispatchers can verify time and location that a field representative made a service call to document service level agreements.
ProxPro claims that you will "never be late again" with PROMPT. PROMPT compares your current location to the time and location of your next appointment. It displays the fastest route to avoid traffic (it links to real-time updates) and tells you exactly when to leave. It is a "situation aware" application and is fused to the calendar on your mobile device. Information is "pushed" to the user. It is currently available only on BlackBerry. The benefits of PROMPT might be lower fuel costs and increased service levels.
In this series of presentations at the SiRF Summit, ProxPro came away as the winner of the "people's choice" award.
Sobering Summary
Let us, however, be cautious about over-hyping "location" again. While there is a flurry of activity, new applications and the business models to bring them to market, not everything is going to fall into place without some market shakedown. Magnus Nilsson, CEO of Wayfinder Systems, stated, "It is early days and we are technology driven. We're looking for smart technology that is easy to use. My biggest job is to work with manufacturers to take away features." That's an interesting statement and one drawn from years of watching LBS, which is just now developing applications that are not "too much, too soon." Nilsson noted that navigation applications are still only used an average of once per week.
Nor will the heavy hitters of the Internet - Microsoft and Google - let the mobile location market slip by without some input. Rich Miner, group manager for Google's Mobile Platform, was asked if Android (Google's open source operating system) and Chrome (Google's new Internet browser) will be the platform for "all things and all places." Miner said, "Android is a platform for a small memory footprint, and could find its way into consumer devices. Its rich set of services will be made available as open source under Apache licenses." How friendly is Android to location? "[Location] is important to Android and Google; anytime Google returns a search we want it to be context relevant and location is one of those contexts," said Miner. "Carriers have done a poor job for developers to build applications... [They] have missed an opportunity to be a value-added pipe...People will bypass them and just use GPS."
So, the stage is set for some interesting battles: Device manufacturers, Internet players, cellular carriers and application developers all want a piece of the LBS market. As we discussed in a recent podcast, the time is certainly coming when we will rely on a single converged device for voice, data and Internet. The "four screens" to which Balsillie referred, occupying one device, presents an interesting vision for the future of mobile communications and entertainment. And if location becomes the embedded and standard service that we now assume it will be in most all mobile devices, a "push to locate" function will be at your fingertips for far more than just navigation.
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