LBSfix.com

a reflection on the past 4 months of LBS

I was reflecting this week on some major moves by key players in the mobile LBS sector.  Let’s go back a few months.  TeleNav, on the back of distribution deals with Sprint and ATT file for an IPO.  Next, Networks in Motion sells to TCS for $175M.  Coincidently and or simultaneously Google announces their free Map and Nav product on Android. Impeccable timing if you are not a fan of TeleNav.  A few months later Nokia announces free Nav on all of their devices.  

 

A few weeks at MWC in Barcelona we hear from Google that there are 60k new Android devices activating every day (without any growth that will be 21.9 million in 2010), a formidable base of users for free nav.  Next we hear that Nokia’s #s are equally impressive boasting 1 million new users in 1 week.  We also hear news that Garmin along with Asus are releasing an Android powered Nuvi phone.  Wonder if that one will have the free nav feature enabled???  One of the key takeaways is that the OEMs see tremendous value in LBS and have taken strong positions in their utilization of the feature as a differentiator. 

 

A quite announcement comes out of Apple that they are restricting mobile location based ads.  Without specifics from Cupertino, the web was awash in ideas of what this could mean.  As I shared with Dan Butcher at Mobile Marketer, I think this is about preservation of user experience.  I think it is also a very real recognition of the value that location ads to mobile advertising.  Game and app developers must think the same thing as they are all chomping at the bit to add location ads.  As with the nav example above, this move by Apple signifies the value of location with respect to a major economic category, mobile advertising. 

 

Pretty funny post from MG Siegler on TechCrunch gave a comical view into how users of FourSquares check in feature can leave themselves exposed to a ravenous group of twitter scouring burglars.   This was based on a new site called pleaserobme.com.  BTW, disregard my check in from Logan Airport this am.  I am standing guard, barricaded in my house with loaded shotgun and second amendment in hand.  The take away here is that location is sensitive information and should be in total control of the user.  If you do not want someone to know where you are, don’t tell them.  I think it is pretty simple. 

 

So, what does all of this mean?  How are these stories connected?  Like retail, it’s location location location.   But it is also money, money money.  LBS and LBA (Location Based Advertising) are clearly on their way to becoming significant sources of revenue for a lot of companies.

GPS is a "Top Innovation of the Decade" and it helped NiM sell for $170M

Two interesting stories in the world of GPS today;

1. GPS was named one of the top 10 innovations of the decade by ABCNews.  Story here.  GPS has been around for decades, so why is is a top innovation of this decade? As GPSWorld.com points out, it was the turning off of Selective Availability in May of 2000 that improved accuracy and effectively open the technology to developer s and manufacturers letting them create thing like pet finders, fleet tracking, family finders, WHERE and PND solutions.

2. TCS (Nasdaq: TSYS) or TeleCommunication Systems announced today that they are buying turn-by-turn navigation provider Networks in Motion for $170M in cash, stock and promissory notes.  An interesting move by TCS for sure.  This comes on the heals of TeleNav's S1 filing to go public and looking to raise $175M, and Google's announcement and delivery of Google Maps Navigation which is free on the Android OS.  So, is this a strategic move by TCS to fatten themselves up for an acquisition by a bigger player like MSFT, or maybe even Garmin?  Time will tell, but I think that specifically on the heals of the Google announcement this is a great exit for NiM.    

Been a while...

Ok, so it’s been a while since I have posted here.  In fact it’s been about 762 days.  It’s not due to a lack of interest, or time, or the fact that I have been lazy, rather this has been a research project to provide for reflection on how much has changed in the LBS space in the past 2 years.  Well, maybe it’s a bit of laziness (not that I haven’t been busy in the past year). 

In reflection on the past two years, more has happened in the past 12 months than have happened in the past 3+ years.  Prior to this post, the major milestones in the mobile LBS space have been the launch of voice guided navigation from folks like Telenav, Telmap, Garmin, etc.  There were a handful of POI apps, activity based apps (BiM being one of my favorites), and the advent of social networking apps led by Buddy Beacon on Helio, now owned by Virgin.   

So, what has happened that has helped catapult the LBS market into the mainstream for both consumer and media?  Well, a few product launches have helped drive mass market awareness to LBS, namely the iPhone 3G and 2.0 software for 2G devices driving the development of hundreds of GPS apps, the recent launch of the Google G1 on T-Mobile, the announcement of the NuviFone from Garmin, advancements and acquisitions by Nokia, and the launch of GPS devices from AT&T. 

There has been some consolidation and acquisition, as well as the birth of a number of companies into the mobile LBS space.  Many have said that LBS is one of the hottest aspect of mobile today.  I can’t agree more.  The ringtone market is washed up, as is  wallpaper, generic apps, etc.  Music and video are still struggling with business models and adoption.  LBS stands out as a key category of growth both from consumer adoption (NIM reports great consumer adoption on Verizon with VZ navigator, reporting 3 million paid subs on their platform) and business models (MSFT pushing a $100 million search deal with location, again on Verizon). 

Are we at a tipping point for Mobile LBS?  Well, I think after 5 years, we are there.  The analysts are predicting a huge market in a few years.  Dominique Bonte at ABI predicts a global market of $13 billion in LBS by 2013. 

So, what’s next?  My belief is acquisitions will make most of the headlines in 2009.  Larger firms involved in the space, as well as those on the peripheral are going to get involved.   In a down economy, larger firms with strong cash positions will take advantage and gobble up market share.  It won’t be tough for some of the big guys to pull together a few successful start-ups to be well positioned as the economy starts to turn.  The companies that have large developer bases, impressive consumer adoption, carrier deals, and unique services will be the first to get acquired.  Apps that drive social networking, dynamic POI, and integrated ad platforms will be at the top of every acquirers list. 

 

From a services perspective, advertising will be a huge area of focus for developers in the LBS / GPS category.  Within some of the econ pundits predicting a change in the macro-economic forecast in 2H '09, advertisers will be ready to turn the budgets back on.  Brands will begin to see the adoption of mobile LBS applications, along with the success rates of certain campaigns, and trigger more spending. 

 

What ever happens, I am sure that it will be an exciting year.  I hope you check back here again soon...i.e. not in 762 days.

Socialight is Back!

After raising funds back in October, the guys at Socialight have been hard at work, and last week announced that Socialight is back.  In an e-mail sent on Friday, Micheal and Dan highlighted the following new features:

* more ways to access Socialight while mobile - new mobile web (WAP) and text messaging (SMS) interfaces let you find and create Sticky Notes anytime, anywhere.

* more ways to connect with other people – message users directly, post on users’ pages and invite contacts through easy address book importing.

* enhance the networks and content you've already got by importing GeoRSS feeds from sites like Flickr to share content from specific places. If you have your own site like a blog or a MySpace page, you can also embed Socialight widgets right there.

* tools for publishers (even you!) to create opt-in channels. WCities and Movie Locations Guide are already programming Socialight channels, with many more coming soon.

Has GPS enabled Mobile Social Networking arrived??

In the middle of November I blogged that Boost Mobile (subsidiary of Sprint Nextel) had launched a mobile buddy finder application called Boost Loopt.  This weekend I saw ads for the service plastered on ESPN.  It was a cool ad, playing off of the Boost "Where you at?" tag line.  Two guys go back and forth asking each other where they're at....next you see their locations as dots on the screen.  The ad concludes with a call to action to text the word "dots" to the short code BOOST - 26678. 

So, main stream marketing does not necessarily mean that a product category has arrived, but it looks like Boost is putting a lot of effort behind the ad campaign.  Soon after the launch Boost boasted 40,000 users on Boost Loopt.  I wonder what they have today.

Comcast gets into the Cell phone business

Last week, Comcast announced that they are beginning to offer cell phone service through Sprint in the Boston area.  While this goal has been widely know, there was an interesting piece in this story at Reuters that included the following comment: "Comcast is offering wireless as an add-on for subscribers of its "triple play" package of cable TV, telephone and Internet services. The price is $33 a month for 200 minutes and such services as voicemail, navigation and call forwarding."  Interesting to note that the $33 service will include navigation.  I know that Sprint offers navigation services from MapQuest, Telenav, Garmin and Rand McNally.  I wonder if one of them got a deal to bundle in the service. 

Thursday Thought - Google

So, it has been a while since I have had a thought...a Thursday Thought that is.  My every week idea has slipped to once a quarter...I will work on that. 

So, I just read the cNet News.com interview with Deep Nishar, Dir of Product Management at Google.  The title of the article is "Google's ambitions going mobile."  I thought that it has been an interesting few weeks with regards to Google and their mobile ambitions. 

First, Eric Schmidt, Google’s CEO in an interview with Reuters says that cell phones should be free.    He said that cell phones are becoming more like personal computers, and that advertising should be a viable form of subsidy.

Next, we hear from Chris Sacca, head of special initiatives at Google, criticizing cell phone carriers for attempting to block Google from delivering their downloadable applications to carrier customers.   

So Mr. Schmidt wants carriers to give the phones away for free, very much implying that the future revenue stream on mobile devices is in advertising.  I am curious about the "advertising should make them free" model.  The last catalog that I got from Dell was not offering free computers so that I can search for stuff on Google.  The Best Buy catalog was not offering free HDTVs so that I can watch TV ads.  I understand the objective, and think that this may be an early salvo for Google to test the waters of the concept of offering their own phones.  I have long believed that they would have their name etched onto the outside of a phone, not just on an app that appears therein. 

Then Mr. Sacca is complaining that the carriers are trying to block Googles access to their customers.  Was this an attempt to paint the carriers into a corner? -  The internet is free, tear down those walled gardens and give us your customers.  Mr. Sacca feels that a carrier wanting to have some control over what a subscriber downloads to their handset has "scary, scary implications".   From a carrier perspective, the notion of hundreds of thousands of phone calls into their customer service call centers (vs. the application developers) when the applications do not work have scary implications. 

Next, Mr. Nishar discusses location based services as the "second big category we are focusing on".   Not too much of a surprise here.  LBS and advertising will go hand in hand.  LBS will increase the value of an ad impression exponentially.  The cell phone makes things individual, the location makes things relevant.  Advertisers will pay top dollar for both.  When asked what is next for Google in the mobile market, Mr. Nishar says "I think you'll see us do more with location-based services, like developing more locally flavored products."   Advertising is Googles product. 

So, free phones + carrier compliance + location flavored products = huge mobile advertising push for Google.  Think about it...there are many more cell phones connected to the internet worldwide than there are computers.  Google's business model is advertising.  In order to sustain their dominant position in the advertising business, Google needs to dive deep into mobile. 

The question...err Thought that I have is this, will Google, and if so when, make a strong move into the mobile space?  When will we see a Google MVNO branded Moto RaZR offered for $10 per month with unlimited advertising?  I think it is on the horizon.  What do you think?

InfoSpace offers 60 day free trial

In the increasingly competitive space of mobile local search, InfoSpace just announced a 60 day free trial of their Find It service.  Based on a new clip on RCRNews.com the Find It service offers "GPS-enabled local search, spoken turn-by-turn directions, help in locating Wi-Fi hot spots, and local event listings. It also offers up-to-date movie listings and the ability to make phone calls with one click instead of dialing a full number".   

The free trial is available only to Sprint's Power Vision Subscribers.   InfoSpace's site gives the following instructions:

If you are a Sprint or Nextel Power Vision subscriber, you can download the 60 Day Free Trial of InfoSpace Find It! Plus.

Visit the Get It! section to get directions on how to download the Free Trial!

More NAVTEQ news

In a press release on Monday, NAVTEQ announced the availability of a new service that will allow retail merchants direct access to the NAVTEQ database to update information related to their locations.  Dubbed NAVTEQ Direct Access, this service will enable companies like Starbucks, Walgreens, and other to make real time updates to the data every time they open or close a location.  Now JAVA crazed people will have a chance to find a closer Starbucks to get their fix, as Starbucks opens another 2,400 stores next year.

I found this news release interesting for two reasons.  1. How will users of a PND get updates?  I guess they will come loaded on the new cards/CDs that consumers will have to buy to get the updates.  I wonder if NAVTEQ is considering a model to get the merchants to pay for the updates decreasing the update downside of standalone PNDs.  Alas, there is probably too much profit in those razor blades...I mean update CDs.  2. Will this lead to advertising in PNDs?  If merchants are granted access to update their information, could they update it with coming soon messages - a form of advertising?  Will they be granted categorical advertising access?  hmmm...this one could get interesting.

GPS Article in Wireless Week

An interesting article highlighted the cover of Wireless Week in the latest print edition - click here for article. The article, written by Brad Smith, was titled GPS: the Mobile Way.  The article takes a stab at challenging the in car navigation business, saying that navigation from a GPS enabled mobile cell phone is better.  A few points that highlight the argument include the cost – it is cheaper to run and update navigation apps on a cell phone than embedded.   Also, cell phone based navigation systems are not powered on the handset, rather they are networked application which eliminate the need to buy expensive cards to update the systems database.

It was a good and thorough article; however it excluded comments from Sprint Nextel who has led the way with GPS on cell phones.  A major focus was on TeleNav, and there was no mention of Garmin, Rand McNally, MapQuest and others who are in the space.  Did these guys not return calls for comment?  I wonder. 

Some interesting highlights include:

• Qualcomm is stating that they have shipped over 200 million handsets with embedded GPS via their gpsONE technology.
• Ken Hyers of ABI Research says that there are 12 million subscribers worldwide utilizing GPS on their cell phone.  He expects that number to reach 315 million in 5 years.
• IMS Research is predicting a 40% compound annual growth rate (CAGR) in revenues attributed to cellular based GPS applications.
• Cingular, who recently launched TeleNavs navigation application has been pleased with the results - "Based on our plans, we are ahead of our sales expectations," Laura Johnson senior director of enterprise solutions.
• Verizon is claiming that their pricing model for VZ Navigator is one of the reasons that it is so popular with subscribers.  Verizon offers the service for $2.99 for 24 hours of usage.
• Rob Rovetta of Qualcomm thinks that we will be seeing more social networking applications in the future…buddy finders and date finders.