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Will Fragmentation Hurt Location Business?

December 12, 2012  - By
Image: GPS World

Get out of the way, GPS. Wi-Fi is elbowing in on the location game. Wi-Fi operators are tracking people and offering retailers and marketers access to customers’ behavior and location. Traffic patterns emitted by smartphone Wi-Fi signals let network operators keep tabs on what shoppers are doing. Heat maps are being created with data from Wi-Fi points to map out aggregated customer behavior. Nearbuy Systems offers stores software that will let them track the website that a shopper is viewing, overlaid by where the shopper is within the store. However, beware of companies’ hyped up claims on indoor location. Another worry is the deployment of proprietary location systems which reduce overall usefulness. And some offerings are simply PowerPoint aspirations. In other news, Apple and Google are kings of the hill; in-vehicle mapping belongs to Nokia; and location privacy of a different sort.

Fragmented Indoor Location. If proprietary indoor location systems are developed, the market will be hampered. Ben Rodilitz of Level8 noted that, while attending GPS Wireless last March, he was bemused by the excitement regarding indoor location as manifested in a number of one-off, proprietary systems. If Home Depot used its own system, an airport used another, and a shopping mall implemented a third, ubiquitous indoor location would be problematic. “I know companies like Qualcomm, Broadcom, and SiRF/CSR were building competing platforms; one would hope this is a vehicle for best-of-breed choices for service providers,” says Rodilitz. I am glad to see the formation of the In-Location Alliance and the players who are supporting it.”

Other Complications. The nuts and bolts of indoor location aren’t easy peasy. “For detailed location pinpointing in places like malls, a high density of Wi-Fi radios need to be deployed and it isn’t super cheap to do so,” says Joseph DeStasio of Boingo Wireless. Stores may want to deploy a denser Wi-Fi system than in the outer mall. But it can be a clunky transition between two different Wi-Fi systems. DeStasio estimates that true mobile retail location-based advertising/couponing at malls is still 18 months away.

Mapping in Vehicles. Nokia may be battered, but the mapping it acquired years ago from its acquisition of Navteq is shining bright. Companies have long fought over “ownership” of the in-dash navigation market, and Navteq lords over the market, powering four out of five systems. Nokia has deals with many car makers, including BMW, Hyundai, Mercedes, and Volkswagen, as well as with Pioneer and Garmin.

Wireless Data Privacy and Mooching. There is always an interesting mobile location privacy case. In Pennsylvania, police obtained a warrant to search the house where child pornography was being downloaded. Police determined that the offender was a neighbor who had been free-loading on the house’s wireless Internet. The suspect was found with Moocherhunter, an app to identify wireless moochers. The suspect argued that police needed a warrant to use the app to locate him. The court ruled that he “could have no reasonable expectation of privacy in the signal he was sending to or receiving” from the wireless router.

More on Wi-Fi. Towerstream is building wholesale Wi-Fi access points across some urban regions, including Manhattan, with 1,000 access spots arranged in a giant dense honeycomb across the Big Apple. Before you equate this with previous municipal wireless disasters, know that these networks are several times fasters and don’t involve local government.

Towerstream is granting users four hours use with no charge if the user will interact with a location specific advertisement. These deals may be targeted to within dozens of feet of the user. Since service over Wi-Fi doesn’t count against U.S. mobile data limits, usage is particularly appealing to 18-34 year olds, who may be wallet constrained and open to viewing location-based ads in exchange for streaming video at high speeds.

Oligopoly! Google’s Android and Apple’s iOS continue to wipe the floor with their competition. Together they controlled 87.9 percent of the U.S. smartphone market in October, according to comScore. Android ended October with 53.6 percent nationwide smartphone share, increasing 1.4 percentage points over July. iOS grew its U.S. market share from 33.4 percent in July to 34.3 percent in October, a 0.9 percent improvement.

Tweet This. Use of social media and social networking is growing rapidly. Consumers continue to spend more time on social networks than on any other category of site—roughly 30 percent of total time online via mobile, reports Nielsen and NM Incite. Facebook remains the top social network, followed by Twitter and Blogger, but new social media sites continue to emerge.

Foursquare Wants Money. The tepid, if not poor, performances of social media IPOs has made investors skittish. The fates of Facebook, Zynga and GroupOn stocks have weighed heavily on this category. Foursquare, which pioneered location check-ins and is now succeeding with target location couponing, is having difficulty attracting added investment, reports the Wall Street Journal. Foursquare counts more than 25 million registered users, with only about 8 million accessing the app monthly. Some investors believe the company is moving too slowly to monetize.

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