2008 Will Be Good Riddance For Some Companies

December 11, 2008 By: Kevin Dennehy

LBS Insider Newsletter, December 2008

2008 Will Be Good Riddance For Some Companies

It has been a roller coaster ride for most location-based services (LBS) companies in 2008. It was supposed to be the year that connected portable navigation systems were introduced and location-based advertising finally took off. At worldwide conferences, analysts seem to be saying, again, wait until next year for some applications and services.

For every success story like Verizon's VZ Navigator in 2008, there have been stories about companies delaying product rollouts or discontinuing entire hardware lines. Thilo Koslowski, Gartner vice president, continued on his theme that PND companies will continue to transform in 2009 and beyond. read more

"I am predicting that by the end 2011 two of the four leading personal navigation devices (PND) manufacturers will transform into hardware-independent, personal navigation service (PNS) providers and/or reposition their hardware as vehicle-centric Mobile Internet Devices (MIDs)," Koslowski said.

Marty Feuerstein, CTO of Polaris Wireless, a company advocating a hybrid location solution, said that for LBS in 2009, GPS and A-GPS devices will continue to deeply penetrate the consumer market and gain widespread awareness. But as applications move beyond navigation, customers will become more acutely aware of the shortcomings.

"Many emerging and promising beyond navigation applications, such as social networks and child finder, incur a heavy indoor location component that cannot be met with GPS/A-GPS alone," Feuerstein said. "Also many location applications require fast time to fix, which cannot be consistently achieved with GPS/A-GPS alone in challenging urban and indoor situations. 2009 will witness handsets and terminal devices expanding multimode capabilities, incorporating a complex mix of 2G, 3G, Wi-Fi, Bluetooth, GPS and early 4G rollouts. Customers will expect seamless performance for voice, data, and location applications as they opportunistically use different wireless networks based on when and where they are."

Koslowski, at the recent Navigation and Location conference in San Jose, said that in terms of future location-based advertising, consumers will buy into it so long as it gives them information, not just ads. "It has to give them information with the ad," he said. "If it subsidizes a service or the services is giving away for free, that's good for the consumer."

Jim Nardulli, formerly with Magellan and now with Nav N Go, said that the market definitely will be looking for newer pricing strategies and services. "We may see PNDs shipped with no maps installed. 2009 could be the year of free traffic services sourced by companies," he said.

Steve Andler, Networks in Motion vice president, said that subscription pricing for navigation and other services may be $10 this year, but may drop to $5 in 2009. "If it won't be advertising that pays for [the services], then what will it be? People think they are not paying for voice, but they are," he said.

Overall, such companies as Google, who along with Nokia and Apple, part of the "NAG" attack on the wireless carriers to control the market, really don't care how the technology evolves or is paid for. "It's all about the connectivity. Google is waiting for a [winning] platform to emerge," said Kiley McEvoy, Google product manager. "At that point, we can open the gates to put content into a vehicle."

ITS World Congress Continues to Showcase New Auto Technology

The recent ITS World Congress in New York had a good crowd and lots of booths in a down economy. The World Congress, and its sister ITS America conference, were the big deals in the mobile information industry in the early 1990s — everybody used to go to them. As the years went by, the conferences became even more government-oriented than they had been, and many companies chose to go to more consumer-friendly conferences such as the Consumer Electronics Show and CTIA.

Fortunately, this year's World Congress had a number of worldwide consumer-oriented companies such as TomTom. It also seems to be a strong showcase for new in-vehicle technologies.

One of the companies always at the World Congress, Navteq, showed off its new Map and Positioning Engine (MPE) strategy to make map-enhanced advanced driver assistance systems (ADAS) available to all vehicles, even in cars without an installed navigation system or navigable map. Bob Denaro, Navteq vice president, said that the MPE quick-starts the development of applications that will be directly installed in a vehicle's main electronics unit — something others said couldn't be done.

"We've had tremendous response for the unit. We do the software and ST Microelectronics does the hardware," Denaro said.

GPS World Market Insights Webinar Series: LBS

Don't forget to sign up for GPS World's LBS in 2009: Consumer and Enterprise Markets Evolve webinar. The free webinar starts at 10 a.m. PST/1 p.m. EST on Dec. 16. Yours truly, Kevin Dennehy, will be the moderator and Clem Driscoll, president of CJ Driscoll Associates, will be the main speaker. Main topics will include the whole array of location-based services: navigation, real-time traffic information, local search, social networking, enterprise solutions, and entertainment/recreation. Find out what market segment has the most consumer appeal, what pricing model will win and where will the biggest revenue stream come from.