CES Back on Track for Many Companies

January 13, 2010 By: Kevin Dennehy

LBS Insider, January 2010

The 2010 International Consumer Electronics Show in Las Vegas was down in attendance last year—some estimate as much as 40 percent. However, a new feeling of optimism, and several product rollouts, made this year’s edition seem livelier—even in a down economy. Ford, once again, is touting new features for its Sync telematics system and other companies are following along.

The International Consumer Electronics Show in Las Vegas kicked off with a keynote address from Alan Mulally, president and chief executive officer of Ford Motor Co., who said that telematics still is a big deal for the automaker through its Sync platform. While discussing Sync, Mulally announced the “myFord Touch,” an in-dash interface to help consumers better access content and control features.

Ford has already shared the Sync SDK platform with Pandora, Stitcher.com, and Twitter and is developing and working with new partners for the new “myFord Touch” interface. The company is now opening its Sync platform to additional third-party application developers for future connected services.

The significance of Sync is that not only is a major automaker sticking with a connected auto platform, Ford is still partnering with industry companies despite a down economy. An example of this new strategy is Ford’s announcement that the company will become the first automaker to use Inrix’ real-time traffic information for 100,000 miles of roadway. The Inrix traffic service will be part of Sync’s Traffic Directions and Information navigation services.

Another company attempting to grab a piece of the auto market, Hughes Telematics, says it already has the technologies that Ford touts in its Mercedes-Benz mbrace telematics service. The service features a downloadable iPhone and BlackBerry application that connects directly to vehicles worldwide, the company said.

CES has always been a roll-out show for portable navigation devices, good economy or bad economy. TomTom rolled out a new $100 personal navigation device, which may spur a trend that has been championed by such companies as Nextar. In addition, Motorola, which has been relatively quiet in the LBS space, showed off its two MotoNav units that feature traffic alerts and are compatible with Bluetooth-enabled phones.

While not really admitting how big the crowd was, the Consumer Electronics Association, the parent organization that sponsors CES, says there were more than 2,500 exhibitors, with 330 companies exhibiting for the first time at the massive show.

TCS Talks about Recent NIM Purchase

TeleCommunication Systems made a big statement in the LBS space by recently buying Networks in Motion. After speaking with analysts and pundits about the hows and whys of the purchase, GPS World’s LBS Insider is now getting their side of the story with an interview with Elliott Hamilton, the company’s senior director of strategic planning.

One of the big questions many in the industry believe TCS needs to deal with is the decision by Google to, in essence, "give away" its navigation services for free. Hamilton believes that the Google incursion, while not unexpected, has several issues.

“Google's entry into free navigation was certainly not unexpected, and we see it as both a positive and a negative. Google can bring a lot of attention to a segment such as handset-based navigation, thereby increasing the total addressable market for the service,” Hamilton said. “No matter how successful you believe Google will be, their handsets will only account for a small percent of the total market. In addition, offering a turn-by-turn navigation app on a handset is surprisingly quite complicated. A lot of effort is required to successful port and test the application on different phones, chipsets, and firmware.”

Hamilton said it is not clear who will take this testing responsibility if the turn-by-turn application is part of the Android operating system. “Google's strategy of offering applications such as turn-by-turn may prove non-beneficial in the long run as developers may not want to write for the Android platform if they think that Google will offer their own application once an application category becomes very popular,” he said.

Regarding NIM’s current management, structure, and products, Hamilton said the company will remain basically the same. “We are keeping NIM's management team intact as they have been highly successful and have great experience. Their navigation application will be combined with our infrastructure and other LBS applications into an end-to-end solution for the mobile operators around the globe,” he said.

In terms of NIM’s foray into overseas markets, which have not been as financially successful, Hamilton said there may be a change soon. “NIM as well as other LBS application vendors have not been as successful overseas as in North America mainly because most global operators have not implemented their own precise LBS infrastructure the same way North American operators have done. Thus, vendors such as Nokia have stepped in and offered their own solutions to the marketplace,” he said. “We see the balance of power, however, starting to shift. TCS is in talks with operators around the world about deploying their own precise LBS infrastructure based on assisted GPS. When they do, they will want their own branded LBS applications. Thus, we will leverage NIM's navigation application as we sell our LBS infrastructure and other LBS applications to mobile operators globally.”

Hamilton said TCS has focused on LBS since it acquired Xypoint in 2001 for the U.S. E-911 market. “After taking our E-911 LBS technology into the commercial space with deployments at Hutchison properties around the world, it became evident to us that having applications combined with our infrastructure was the best way to help the operators succeed with LBS,” he said. “TCS acquired Kivera in 2004. That gave us traffic and mapping applications, but it was obvious that we needed to have a complete portfolio of applications. Earlier this year, we acquired the LBS assets of Autodesk, which included the most successful family locator application ever deployed that was branded by Verizon, as well as a very popular mobile asset locator application branded by Sprint Nextel.”

Hamilton said the only piece that was missing was a top tier navigation application. “NIM had always been on our radar screen, as we saw them having the most popular and largest scalable navigation software for mobile operators. Also making them attractive was their ability to deploy their application almost anywhere in the world as they had already deployed in 38 countries with 10 languages,” he said.

LBS Market Maturing

With the LBS industry transitioning from a nascent experimental stage to a fast growth stage, it is natural that there will be a consolidation taking place, but TCS can succeed because of its complete infrastructure, Hamilton said.

“We see the GSM mobile operators around the globe as being the next large addressable market for TCS. We believe the GSM operators are poised to deploy their own network-based precise assisted GPS solution, just like the CDMA operators have done quite successfully,” he said. “TCS can bring them not only the assisted GPS infrastructure that they need, but also white label LBS applications. We believe that both GSM operators and CDMA operators will not want to allow handset vendors to control and dominate the marketplace, especially for LBS services.”

Hamilton said that operators will always want to have their own branded core applications, “and not allow any one vendor such as Google to dominate the mindshare of their customers.” He said that TCS will help the mobile operators to offer their own branded apps and in ways that other third-party vendors cannot replicate. “This may be adapted to fit into an advertising, subscription, or hybrid model,” he said.