Location is the buzz.
You walk out of your office and messages sent to your desktop are automatically forwarded to your phone because it knows you are away.
You are in a new city and need to find an ATM within walking distance. You dial your bank and receive a message with three nearby machines.
Walking down the street, you pass a Starbucks and your phone chimes with a message good for a $1 off a latte.
Your phone alerts you that traffic has changed the travel time to your next appointment to 45 minutes and offers an alternative route and driving directions using surface streets.
The latest buzz in wireless is location. During the past nine months, companies involved with location services such as Xypoint Corp. have been espousing phone location as a way to make applications and services more user friendly and applicable to the mobile consumer.
The promise of location-enabled services is making investors stop and take notice and offering techies their newest challenges. Location offers companies a chance to personalize services even beyond what they are offering on the Internet. Location also offers some challenges that are degrees beyond those faced by the Internet.
To truly deliver location-enabled services, the industry must first deal with the multitude of interfaces, technologies, applications and standards that would limit the effectiveness of delivering usable services. More importantly, the wireless industry must address the concerns that consumers will have in deciding to use services that locate them via their cell phone.
More than a box
The recent buzz on location has made it appear that these services are a forgone conclusion and that a simple flip of the switch is all that stands in the way of delivering location-relevant services.
The technical challenge of location services centers primarily around the multitudes of technologies and applications that are needed to make a service work. The technologies used for the actual location of phones varies broadly depending on whether the carrier has chosen a handset or network solution, if the phone is being used in a rural area or an urban one and the length of time it takes to locate the phone.
The multitude of interfaces for location technology creates challenges for companies building applications. They are forced to spend development time trying to integrate with as many technologies as possible, rather than focus on the core application.
Finally, most location services will need to communicate with call centers that serve both wireless and landline customers, such as E911 and 411. This creates a final challenge as data must be packaged and routed in a way that existing infrastructure can handle.
These challenges must be overcome if location services will truly work.
Will consumers want to be located?
Overcoming the technological challenges is in some respects very simple when compared with the obstacles that face the industry in gaining consumer adoption.
Consumers undoubtedly may find location services fascinating or compelling, but they also may find them intrusive and dare I say, Big-Brotherish.
Personalization on the Internet provides consumers customer recognition and intelligent filtering to only deliver information that is relevant. Location adds a third dimension to personalization services.
On the Internet, a consumer’s location is not much of an issue. People freely give out their ZIP codes to gain personalized, relevant information. However, because that information is constant, stagnant, not very precise and not bound to the user, it is less valuable and therefore, the consumer is willing to give out that information.
A person’s cellular telephone is completely another issue. Cell phones are a very personal item. We carry them with us almost everywhere we go; they are intertwined with our lives and our location. Their styles, colors and functions tend to reflect our personalities. They are both a tool and an accessory, which makes them very different from the impersonal computer.
The Internet provides us with some examples, though, of how consumers will react when their private information is abused without consent or knowledge. The outcry over DoubleClick’s plan to match online and offline consumer data comes very close to what industry could experience if companies attempt to do the same with mobile location. In addition, the discovery that companies were using opt-out policies to gain control of consumer information without explicit consent provoked a similar campaign.
One can only expect that consumers will react more vehemently if they discovered that something as personal and close as their immediate location or location patterns were being sold to the highest bidder without their permission.
Consumers will most certainly weigh the costs against the benefits when debating about using services that pinpoint their location. A service such as E911 is an obvious decision; the person calls 911 wanting to be located and trusts the public service answering point will not abuse that information. As services become more commercial in nature, the consumer still might want to be located, however the issues of trust and of benefit greatly come into play.
Will I want to be located so I can find the nearest ATM? What if by doing this, I will be sent electronic coupons from nearby places to spend that cash? What if by doing this, I am leaving a breadcrumb, that in time adds up to hundreds of breadcrumbs that pattern my movements and can be used to target me?
This line of thinking introduces a great deal of doubt into the adoption of location-enhanced services, and as an industry, we need to have the foresight to recognize these concerns and address them if we are going to stimulate consumer usage.
Leadership: Taking care of your customers
Consumers need to feel in control of their location, and they will need to know that the wireless carrier will protect them from third parties who wish to capitalize on using their location without their approval.
People will want to have a level of control of when, where and how their location is used. I am more likely to value the service, rather than view it as an intrusion, if I determine when I am located. Whether I am located on-demand, on schedule, or on event does not matter; it only matters that I am able to control this.
In addition to needing control over when they are located, consumers will need to control the reason they are located. Opt-in services will give the consumer a choice in determining what their location is used for and by whom, which provides them with a comfort level about the service.
As with the Internet, building trust is mandatory to build a customer base. Ask almost any Internet novice whether they would rather make a purchase at either Amazon.com or an independent online bookseller whom they would choose and the answer would invariably be Amazon. Why? Amazon has built its reputation on trust. Most consumers know that when they shop on Amazon, their transactions are safe from fraud, the top concern among online shoppers. By building this level of trust, Amazon is able to gain new customers and provide a highly personalized shopping experience to repeat customers.
Establishing trust is very important for the wireless industry, because the consumer is giving it not just a credit card or shipping address, but also their personal, immediate location.
If someone you didn’t know called you up on your cell phone and offered you a discounted taxi fare if you gave them your precise location, would you do it? What if that person was a friend calling to offer you a ride? My guess is it would be a bit unnerving to give a complete stranger your location, yet you would gladly give your location information to a friend for exactly the same service.
In wireless location, I believe only the carrier can foster the level of trust with their customer and spur adoption of location
-enhanced services. The wireless carrier already has a strong relationship with the customer that would be difficult, if not impossible, to develop as an outsider or third party. In addition, wireless carriers are in a unique position not only ro expose the consumer to great new services, but they also have the duty to protect the customer from services that would abuse their location information.
If the wireless industry is going to stimulate the wireless customer base to use value-added location services, it must give the consumer control over their location and it must endeavor to build a relationship of trust with that consumer. The technological challenges are being met; now the real challenge is to develop services that take consumer privacy issues into account, and lead as an industry by using technology to alleviate consumer concerns and deliver services they find useful and compelling.
Ken Arneson is chief executive officer of Xypoint Corp., which provides wireless infrastructure and phone location-based services.
