Here are my predictions for the LBS industry in 2003:
- Wireless Carriers Sobbing and Sobering
- "Where" are the Wireless Consumers?
- The Sting of the Airbags
- "Fleet-ing" Opportunities
- Think "Hub", Not "Hubbub"
- Just Around the Next Corner...
- Ubiquity: LDT (Location Determining Technology) must be ubiquitous across wireless networks - a challenge the carriers will only begin to meet in 2003.Not until 2004 will location-centric offerings be mainstream and touted as a competitive differentiator.Right now, the carriers' differentiator for wireless subscribers is the capture and sharing of images from mobile devices.The determination and use of a wireless subscriber's location may be the "next big thing" on the horizon, but not until 2004.
- Privacy: Wireless carriers, TSPs and technology providers will continue to grapple with the legal and business issues surrounding personal privacy - in particular, who will own and have access to a wireless user's location. Expect the first major legal battle to formulate in 2003 as LBS goes mainstream.
- Consumer Demand: LBS providers think they know what consumers are willing to pay for when it comes to location.Unfortunately, 2002 has shown them that business models and consumer demand are not one and the same - expect a re-focus on the basics from a consumer standpoint.
- Beyond Cellular: As Wi-Fi adoption continues to grow, keep an eye on companies such as Newbury Networks and Helsinki-based Ekahau as they roll out Wi-Fi triangulation solutions, which allow service providers to offer location-specific access and content to their Wi-Fi networks.Wi-Fi-based location services will lead to new enterprise-grade location, access control and proximity applications.
Location-specific services are not a quick fix for carriers' financial woes or increasing customer churn.Wireless carriers will eventually roll out LBS, but consumer demand for location-specific applications has not yet moved beyond the "gee-whiz" phase of early adoption.Location, however, will have increasing value as the killer attribute for specific wireless applications such as gaming, entertainment and "info-referrals" (location of the nearest restaurant, etc.).
In 2003, consumers will see the wireless carriers' first attempts at embracing consumer-centric offerings, which blend location determining technologies and location-infrastructure.For example, Nextel partnered with Televigation for the launch of TeleNav, a service that offers GPS navigation to Nextel's Java phone users.Even though a large percentage of their customers are business users, Nextel is betting on the fact that these tech-savvy users will be the early-adopters of LBS in the wireless consumer market.
In 2003, the truth about telematics will finally bubble-up, causing industry leaders to take a hard look at telematics from the end-user's perspective.In particular, telematics service providers (TSPs) will re-assess the safety and security value as seen from the automobile owner's viewpoint. Subscription offerings will give way to transaction-based offerings as TSPs struggle to make the existing subscriber-based models work.
TSPs will be the losers if they continue their attempts to convince the automotive consumer that there is enough recurring value in safety and security only to warrant an ongoing service subscription.The short-term winners in telematics will be technology providers who deliver solutions to automotive OEMs and aftermarket automotive resellers.
Unfortunately, the hype will continue with telematics - as technology
providers and TSPs continue the PR and marketing throttle-up to promote
the entertainment potential of a connected car.Filling up the 'bit tanks'
with movies and MP3 files at the gas pump or in the parking lot of a retail
store will move from hyper-ware to demo-ware in 2003.Telematics needs
this futuristic view, but in the short-term, deriving consumer value only
from telematics safety and security applications will need to be re-examined
with a new emphasis placed on the conveniences provided by a complete in-vehicle
communications solution (e.g.handsfree operation, voice-activated dialing,
auto-synchronization capabilities).A "next-term" focus for telematics
still needs to be on the future capacity for "infotainment" services and
content being delivered to the vehicle.
2003 will be the year of saturation, followed by consolidation on the fleet and enterprise side of LBS.Asset tracking and AVL solutions provide significant cost reduction and enhancements in efficiency through location-based offerings, but there are currently too many "me-too" hardware and service offerings bombarding the fleet and dispatch markets.As a result, the market is becoming saturated by an overwhelming number of GPS-enabled "black box" offerings.The slow economic climate combined with this saturated market, will make it difficult for many asset tracking and AVL providers to attract and capture enough market share to sustain their business models.
I have to agree with many others in the industry that enterprise location
services will mature well before any consumer offering (including telematics)
can sustain a business model.
In the enterprise market - the vehicle will become a wireless connectivity hub for mobile and field force automation.As a mobile hub, the vehicle (and surrounding mobile devices) will require a contextual location to add value to the data it is collecting and communicating between backend enterprise services and the field workforce.This will expand the opportunity for fleet-focused wireless data providers that are offering location and geospatial solutions.
The key will be how the location data and other information is moved between all the wireless appendages, which will have become a part of the productivity potential for the enterprises' mobile forces.There is a unique opportunity for AVL and asset tracking providers to differentiate themselves by focusing on vehicle-centric implementations, which utilize both Bluetooth and Wi-Fi capabilities.
The location-based services market segment is no longer in its infancy. Location determining technologies combined with mature GIS solutions are available today, and are ready for horizontal mass markets.The question remains; are these mass consumer and enterprise markets mature enough to sustain LBS?
LBS providers still face many of the same challenges of 2002, and LBS as a technology still needs to overcome certain implementation challenges before widespread adoption can occur.In particular:
As wireless networks and mobile platforms evolve, the infrastructure needed for second-generation LBS capabilities will slowly be put into place, setting the stage for larger offerings at the start of 2004.In addition, consumer uptake for telematics and personal location services will be slow as wireless carriers experiment with the right mix of location-enabled service offerings.Once this evolution has transpired, location-centric applications and LDT will play a key role in defining mobile devices, wireless services and backend infrastructure implementations.LBS is headed in new directions in 2003, the question is not when, but "where" the market will turn.