CTIA Wireless IT: Few Industry Announcements, More Focus on Emerging Profits

October 14, 2009 By: Kevin Dennehy

LBS Insider Newsletter, October 2009

SAN DIEGO — In a challenging worldwide economy, how to monetize location-based services seems to be difficult, particularly when the topic of what are the successful products and campaigns comes up, said speakers at the CTIA Wireless IT conference here.

One executive, whose company has been successful in the LBS space, told attendees that just having an application in Apple’s iPhone apps store may get it lost in a massive shuffle.

“Outside of Apple’s top 100 applications, it’s easy for an application to get lost. It’s not clear that app stores will solve all your problems,” said Steve Andler, Networks in Motion vice president of marketing at the CSR/Sirf Technology Location 2.0 conference held at the same time as CTIA. “For LBS on the iPhone, a one-time purchase is easier to sell. Tom Tom’s recent $99.99 iPhone product is an example. While this is in non-recurring revenue, again, it’s easier to sell.”

There is not enough market awareness for an advertising-based strategy to make LBS free, said Andler, whose company offers its Gokivo product for $4.99 a month for a slew of navigation services. “Why make it free? That requires enormous market scale, base and frequency,” he said.

Andler said that while the portable navigation device market is not entirely dead, there is a shift in the way people use navigation. This shift has been profitable for Networks in Motion, which has earned more than $6 million a month, from first quarter figures, he said.

Another critic of the “free” model said that low cost per thousand impressions, or CPM, may hamper the market. “How the whole media buyer relationship is going to work is not clear right now,” said Bhavin Shah, Polaris Wireless’ director of marketing and business development. “Google is keen on making money on its advertising, with a location component, but it is not clear what 3rd parties are going to do. Location-based advertising is a couple of years away from happening.”

Some Products Announced at CTIA…

While there was a lack of huge business/product announcements at CTIA, there were a couple that are significant to the LBS industry. Denver-based MapQuest, fired a shot over the bow of industry leaders Networks in Motion and TeleNav with their new MapQuest Navigator, which is powered by Israel firm Telmap. MapQuest Navigator’s pricing is low: 30 days for $3.99, 90 days for $9.99 and a full year’s subscription for $29.99.

The company said the navigation system is voice-guided with turn-by-turn, has full route corridor download that features re-calculation for missed turns and continued service in areas with no cell coverage.

Networks in Motion’s big customer, Verizon, offers its VZ Navigator for $9.99 a month for unlimited access, or $2.99 per day as part of its nationwide premium plan. The company also offers its VZ Navigator Global for $19.99 a month on selected phones.

Another company, deCarta, is partnering with T-Mobile for LBS services, including T-Mobile’s web’n’walk product. The T-Mobile product is on nearly 120 devices and will allow turn-by-turn navigation, said Tom Owen, deCarta vice president of wireless business development.

T-Mobile will use deCarta’s software for third-party LBS application development. In addition, T-Mobile will use deCarta’s NavSearch for LBS, mapping and routing.

CTIA Wireless IT Observations

Conference buzz words to not hear again (to go along with “ecosystem”): “experience” (just about every speaker tries to plug something with “your navigation experience,” “your entertainment experience.” One LBS company speaker said it 15 times in five minutes.
The two LBS panels at CTIA Wireless IT featured zero wireless carriers, although one carrier was on a transportation panel. For an industry and conference tied directly to the carriers, this is somewhat of a disappointment for attendees. Maybe we are seeing a change of the guard—automakers ruled the navigation space in the 1990s, carriers this decade…are we seeing others stepping forward (handset and device manufacturers, portals) in the next few years and beyond? Carriers have always been surly about the LBS industry and slow in implementing the FCC’s 911 mandate, but will their lack of purpose lead to lost profits as the worldwide market for LBS consolidates?
Navteq’s LocationPoint advertising product is being used by AAA Discounts. The LocationPoint service offers AAA members highly targeted offers and promotions from local advertisers where they make shopping and purchasing decisions, the company said.
At the Showstoppers event at CTIA, Smarter Agent said it is real estate application is now available on Verizon Wireless handsets. Smarter Agents has deals with Century 21, Prudential and other agencies whose customers use GPS to find homes for sale. Consumers can subscribe to a “Get It Now” feature to research homes and apartments for $1.49 a month.
Robert Acker, who was recently an executive at Dash Navigation, is now heading a start-up called Aha Mobile, which is rolling out an iPhone application that uses Inrix traffic information. Aha Mobile won the Location 2.0 “fast-pitch” presentation as best new application.
At CTIA, Go2 Media said that it confirmed 4.5 million visitors used its local entertainment guide. The recent product features 350 ski resorts in 37 states. CEO Dan Smith said that the company works with the carriers to integrate GPS/LBS to make its service more useful to visitors.