Mobile operators seek role in great location shake-out

Mobile location-based services (LBS) have empowered consumers to find a point of interest, navigate their way there, broadcast their new location and even become the mayor of it. These GPS-enabled consumers are in turn becoming increasingly attractive to advertisers, businesses, application developers, wireless operators and social networks. As a result, LBSs are quickly becoming the next mobile battleground.

The most obvious way to see how popular location has become is to scan the list of location apps in smartphone storefronts. As of September 2009, LBS provider Skyhook Wireless identified more than 4,000 location-based apps for the Apple iPhone App Store and 700 location apps in Google’s Android Marketplace.

But, location, in and of itself, is not what has the industry excited. It’s the potential to use location to augment other forms of data – data that the carriers, and now developers, have at their fingertips. To tap this potential, many developers are opening up their location databases to third parties to build new use cases. Wireless operators and social networks, too, are realizing that to be competitive they have to embrace open application programming interfaces (APIs). The mindset now is that rising tides lift all boats, but really it’s anybody’s game.

APP DEVELOPERS LEAD THE LOCATION CHARGE

A significant portion of the aforementioned 4,000+ location-based apps have already begun opening up their subscriber information to the world. Among these is Geodelic, which went consumer facing when it launched a personalized location app, Sherpa, in conjunction with T-Mobile. The same app, under the Geodelic brand, is now available on Android and the iPhone, where it has already received 320,000 downloads, according to marketing director Drew Beaver.

The app relies on a recommendation engine that suggests nearby locations based on where the user is and what the app learns about its preferences. For example, if the user is a sushi fan that spends a lot of time in downtown Chicago, the app will recognize that and focus on those areas.

Earlier this year Geodelic also launched Discovery Experiences, an open publishing platform that lets business create their own mobile apps by entering their own points of interest. Users enter the branded Geodelic UI, but within it find subsets of location experiences based on the attraction. The Hollywood Walk of Fame organization was among the first to develop an app to include information on movies, specific stars or nearby celebrity hangouts. By opening up publishing, individual, businesses and brands can easily capitalize on Geodelic’s established user base.

“A real challenge for location is to find ways to make sure you have engagement and to maintain it,” Beaver said. “As we leverage the opening publishing aspect of it, anyone can create their own location experience that becomes yours – you’ll promote it, you’ll build, and it will be your world online in a mobile environment.”
Beaver said that with so many apps out there, there will be a massive consolidation by necessity. He believes Geodelic can become the destination of choice because of its app aggregator role, providing value through utility. The company is also striving to differentiate itself from popular social broadcasting apps like Foursquare.

Foursquare recently released an API using location and real-time mobile updates to incentivize its users to check into locations in their area. The service, like competitor Gowalla, rewards its users for broadcasting their location to friends. It has proven extremely popular with its user base of more than 400,000, with traffic to its site tripling in the last two months since November, according to traffic analyst firm Hitwise.

SOCIAL NETWORKS TEST THE WATERS

Foursquare can also automatically send updates to popular social networks through its integration with Twitter and Facebook. Yet while it has taken off tremendously in the past year, the most powerful location API could actually spring from its social networking partners.

Twitter fired up its Geolocation API in November, giving its users a chance to opt-in to have their messages from Twitter apps – not the Twitter site itself – annotated with their exact locations. Essentially any third-party developer can aggregate the data location-stamped Tweets make available, analyze it and create an application from it. The idea is that a location-aware Twitter experience will add value to users because developers can use it to make their apps more relevant and compelling. Since the introduction of the API, Twitter has also added a “trending” feature that will let users track what’s being talked about in a specific geographic region.

“A new world opens when you have Tweets that you know where the sender of the Tweets is located when you are sending them,” said ABI Research analyst Dominique Bonte. “There are all kinds of possibilities there. Instead of organizing Tweets by sender, you could by location – if you are at a conference, you could use location in that way. I think eventually they will also open it to their own Twitter service we use.”

Following Twitter’s foray into LBS, the industry is now waiting to see if Facebook will follow suit. Most believe it’s only a matter of time. The social networking site is reportedly working through non-trivial privacy issues associated with its millions of users’ data, based on the Facebook app’s presence on most GPS-enabled smartphones.

If Facebook itself does anything with location, they will likely start with a manual service in which a user opts in, Bonte said. They wouldn’t leap to tracking in the background or anything more elaborate until they got a feel for their users’ reactions. That being said, he agrees that Facebook will move into location within the year. In the meantime, others, including Verizon Wireless, are already leveraging the social network for their own LBSs. In its latest release of VZ Navigator, VZW included Facebook integration that lets users post statuses or send messages to their Facebook friends that include their exact location attached.

WIRELESS OPERATORS FIGHT TO KEEP LOCATION ON-DECK

Thanks to location aggregators like WaveMarket and uLocate, wireless operators like VZW have a fair shot at owning the location space. These companies provide cross-carrier location services, which are important to make LBSs attractive and widespread. Aggregators assume the responsibility for carrier negotiations, privacy assurance, programming and subscriber data access, making it a much more attractive proposition for developers and carriers to team up.

Sprint has been the most active in location, working with WaveMarket to release its data, but AT&T recently got on board as well. Emily Soelberg, direct of product marketing management at AT&T, said the carrier plans to make its partnership with WaveMarket – just a trial now – official in the short-term future.

Most wireless operators have realized they have to make moves like this as competitors like Google and Apple continue to offer location free of charge based on WiFi and other non-carrier outlets. Soelberg said that the value operators can add is their ability to get data across carriers through relationships like it has with WaveMarket, and that they can ensure a higher degree of accuracy by drawing on the phone’s built in GPS and the network.

“There’s a market place out there for a lot of location content,” Soelberg said. “If you look at across carriers, every time one announces availability, I think it’s great. Because, from a customer and developers standpoint, if you can develop an app and get location across carriers, that app has more value from you.”

Even with the progress, however, carriers realize they can’t do everything themselves. Most have 10 LBS apps in general, compared to the thousands that some app stores boast, Bonte said. There is no way they can manage, develop and market this vast sea of apps themselves. They have to open up their platforms and work with developers in a much better way than they have so far, he said.

“Some carriers still think they can earn money themselves through their branded apps, navigation, etc.,” Bonte said. “But with Google [and Nokia] announcing free navigation, and [Networks in Motion] being acquired by TSC for $110 million, it really indicates that the focus is very quickly shifting toward off-deck, be it Google or Nokia or Apple and social networking sites starting to use location.”