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| Giles Nelson |
Dr Giles Nelson, deputy CTO of Progress Software, on the drivers behind location based services.
Location based services (LBS) are now at the heart of the mobile value proposition. According to analyst firm Forrester, 30% of European online consumers with mobile phones are interested in using mobile GPS and navigation services, while 52% of smartphone owners with unlimited mobile internet packages already do so. Very strong uptake of smartphones, most of which are equipped with GPS, continues, and to that end, Nokia has acquired NAVTEQ, a provider of location based services (LBS).
However, despite this recent surge, LBS are nothing new. In fact, 10 years ago there was a lot of hype around them, fuelled by the froth in the mobile telco market; remember the billions that were bid for UK 3G licenses? So with this in mind, just what will make LBS become mainstream over the coming years?
Location, location, location
In my view, it's all down to the rise of the GPS equipped smartphone that fairly reliable mobile internet access is now ubiquitous. The growth in mobile data is projected to be staggering. According to the recent Cisco Visual Networking Index report, mobile data traffic is set for a staggering 108% compound annual growth from 2009-2014. This will result in global traffic totalling 40 exabytes (an exabyte is one billion gigabytes). That’s 50,000 times the amount of data in the US Library of Congress.
These mind-boggling numbers alone will mean that as GPS-equipped smartphone usage takes off, applications that use the location information won’t be far behind. Mapping is perhaps the most obvious example, dynamically updating a map, centred on the user's current location, as the user moves around. More than useful when you're trying to find the nearest cashpoint in an unfamiliar area, a scenario we're all familiar with.
The Web 2.0 impact
Beyond mapping, a range of alternative location based services are emerging based around social networking, with applications such as Foursquare, Gowalla, and Brightkite.
Rather than use conventional mapping information, they rely upon their user community to create ‘locations’; a bar or restaurant for example, where users can check-in and broadcast their location to other users. Facebook has started to support location; its privacy policy has been changed to allow this. Users will then be able to browse their network by their current location, or be alerted, perhaps, when a friend is within a certain range of them.
Twitter also is now beginning to support location information. Updates to the micro blogging site can be tagged with the phone's location. Shortly, users will be able to browse tweets by location or identify when people they follow are near them. With all these examples, it's important to recognise that the use of location is more than the simple adding of a feature. Location information will significantly change the way in which applications that support it are used. So how will this transcend to the enterprise space?
Benefits for business
The rise of the smartphone is also enabling new business-focused location based applications. Application developer match2blue currently runs interest- and location-based customer relationship management systems for its customers. The company recently signed a deal with Lufthansa Airlines to offer location-based community services to their loyalty programme customers. This will help Lufthansa communicate better with its customers to alert them to changes in flight plans, upgrades and more. It is also intended to provide a community environment for like minded professionals to find and meet each other.
Similarly, retailers such as Starbucks are launching location based loyalty schemes, which provide bonuses to customers who ‘check-in’ to their stores. All this is great, however on the downside, an often cited issue for broad uptake of location based services is that of privacy.
The Privacy issue
Admittedly, there are legitimate issues when it comes to privacy with LBS. Many people would have good reason not to publish their physical location in the public domain. However, I believe the problem of creating policies on whom and what to share location information with is solvable.
Location is another piece of private information and the popularity of existing social networking applications shows that people are willing to share such information to people they trust, whether in a social or business context. Privacy policies will need to evolve and adjust to deal with location information appropriately but evolve successfully they will. So while privacy polices continue to be debated, how do mobile operators get their slice of the potentially lucrative location based pie?
How can operators benefit?
In the years to come, LBS will not only benefit just consumers and application developers, but also network operators. That’s if they choose to. With the consumer having more personalised features and increased communication convenience, the network operators can potentially address discrete market segments based on the different service portfolios.
There are currently several mobile phone operators worldwide offering location based services for a wide range of applications. However, the increased uptake of third-party applications has meant that the number of market players have increased, thus removing the operator from the traditional mobile value chain.
So with this field generating healthy competition, operators need to have a better understanding of the market. These days, it’s not about just the operator but how the whole system is going to benefit individual consumers and the businesses. Further, a premium rate charging by the LBS application developer to the operator offers an opportunity to exploring the absolute potential of the operator’s customer base.
In summary, the smartphone is here to stay. Soon, much like MMS and MMS, location based apps will be commonplace and it'll be another area of technology that we wonder how we survived without.
Progress Software Corporation provides application infrastructure software for the development, deployment, integration and management of business applications. http://www.progress.com/