Location Based Services – Ready for Primetime?
For years I’ve been bullish about the coming onslaught of mobile based location based services. Visions of personalized talking billboards , a la the movie “Minority Report”, seemed within our grasp.

 The requirements for wireless 911 location services seemed to be the necessary catalyst for infrastructure and device capabilities. Despite the hype the rollout has been disappointing.

Why?

 Maybe an analogy to the SMS market of the late 1990’s can provide some clues.

SMS took off as a service when three major events happened. First , and most importantly was inter- carrier cooperation and transport of SMS; Secondly, the emergence of SMS applications beyond user-to-user testing (such as Upoc, text alerts, banking, etc), and lastly a value chain that includes market and connectivity enablers such as mobile marketing firms and SMS aggregators. 

For LBS service we need carrier location transparency, location aggregators and applications that go beyond driving directions and kid finder services. (More on those in later blog). There are, of course, privacy concerns with providing location information to third party application and content providers. The ability to turn location sourcing on and off on the handset should have helped ease the fears. The ability for carriers and/or consumers to blacklist LBS service providers that misused the information would also be necessary.

It seems as though the technology, policy and legal concerns should be easily overcome. So, I ask again, why have these services not developed in a timely manner?
One possible depressing conclusion might be that there may not be the pend-up depend for LBS services that many of us in the wireless industry have predicted and assumed to exist. While I have to acknowledge this as a possibility – I am still strongly in the pro-LBS camp.

Another possible reason is that the policy and legal issues have strangled the market of LBS. Wireless Carriers are conservative by nature (and necessity) and are likely to move at a “prudent” speed for such a service. Since there is real economic incentive to deploy services that increase ARPU, I want to believe, also, that this is not the case. We are seeing lots of navigation and enterprise applications being introduced throughout the market.
Therefore, that leaves the lack of a developed cross-carrier LBS value chain that enables innovative application providers to capitalize and a well-oiled economic and technological model.

Will this model come from within the wireless carrier business model, or outside? It is possible that in handsets will have the capability to provide GPS information over a data channel that is outside of the carriers’ control. How might that business model look for the industry at large?

 Markets and technology do have a way of emerging, either as a controlled introduction from within the existing value chains, or as a disruptive technology that supplants the existing market. It will be interesting to watch which path LBS services take.