U.S. network operators are losing their grip on subscribers who stroll off their decks to buy ringtones, access adult content or simply surf the wireless Web. When it comes to knowing where users are, though, carriers still hold the cards.
Call it the Starbucks scenario: a wireless user and coffee lover unwittingly meanders past an outlet and automatically receives a time-sensitive coupon on his phone for a discounted cup. Mobile marketers and major brands are looking to such location-aware applications as a way to tap consumers on the shoulder with attractive offers at the right time and place.
The key to such efforts, for the most part, is the Global Positioning System, or GPS, which uses roughly two dozen satellites in orbit to pinpoint a location within a few yards. And the technology is quickly going mainstream: Sprint Nextel Corp. and Verizon Wireless are each finding an audience for GPS-enabled mapping and navigation applications that are both affordable and simple enough for the average wireless user to appreciate. Mobile virtual network operator Helio L.L.C. recently outlined a service that allows users to find friends and access driving directions thanks to satellite positioning.
Now, some other players want in on the action-and they’re foregoing carrier partnerships to get it. Nokia Corp., for instance, recently acquired gate5, a Germany-based developer of location-based technology and applications. The handset maker is pushing its new N95, which uses gate5 technology and allows Nokia-not a network operator-to provide location-aware services.
5o9 Inc., a Boulder, Colo.-based startup, is also hoping to gain traction in the mobile GPS arena. The firm claims to have developed technology that effectively swipes location information from a GPS-enabled smart phone and sends the data to 5o9’s servers over the wireless Web.
“The key is to have a GPS-enabled phone,” said 5o9 founder Peter Cranstone. “The GPS talks to the cell phone over a COM port, a COM7 or COM5, and it just chatters away to the mobile device on that protocol. So all you have to do is intercept the datastream, which is really, really simple.”
Users can set profiles, Cranstone said, creating demographic information as well as location data is delivered to 5o9’s servers through an http connection-requiring a smart phone as opposed to a mass-market handset. And the application can be turned off at any time, allowing users to avoid advertisements and other come-ons if they so choose.
Cranstone hopes to partner with retailers, restaurants-anyone who could benefit from knowing where a specific type of consumer at any moment-to deliver targeted, location-specific marketing messages to users.
“The Holy Grail is that you get a message on your smart phone that is so compelling you just want to read it,” Cranstone said. “It’s very limited real estate. If it’s targeted, you’re going to read it. You can only get one (at a time).”
But Cranstone-like just about anyone else looking to circumvent carriers on the GPS/mobile phone playground-faces an uphill battle, according to Ken Hyers of ABI Research. While most U.S. carriers seem to be coming to terms with the concept they can’t be all things to all subscribers, they’re very well-positioned to elbow third-party developers out of GPS-enabled LBS space.
“I don’t think (network operators) would be very pleased with allowing a third party to have that relationship, to get that revenue opportunity without (carriers) getting a cut,” Hyers said. “Operators are in a position in this situation to protect their interests.”
For example, Hyers noted, they could tweak their phones to block 5o9’s application that gleans the location information. And operators still have the overwhelming advantage of deck space, allowing users to easily access an application instead of having to go to a Web site for a download.
Cranstone, however, believes the combination of location awareness and user information will make 5o9’s service more appealing to both marketers and end users. Just as operators are realizing they can’t own the world of mobile content, he said, they should be concerned about increased data revenues and embrace third-party location services.
“When you see the light at the end of the tunnel, and it’s an oncoming train,” said Cranstone, “sometimes it’s better just to embrace the horror.”
