It’s an application that drove an entire segment of the wireless industry. Now, it’s a joke.
Imagine: You’re walking down the street with your trusty mobile phone when you pass by one of the multitudinous Starbucks that litter urban intersections nationwide. You’re not averse to the coffee giant’s apparent plans for world domination, and you’re itching for a super-grande, double-fruppa latte blend with a twist of cinnamon. Sounds good, doesn’t it?
Well, luckily your phone knows that a Starbucks is nearby and that you just happen to love super-grande, double-fruppa latte blends with twists of cinnamon. And, what’s that? There goes your phone now with a message from Starbucks, offering $5 off your next super-grande, double-fruppa latte blend with a twist of cinnamon and directions to the nearest Starbucks-ruled street corner.
It’s the application that industry visionaries have been selling for years, although typically with more optimism and less sarcasm. And now, as the location-services market continues to stagnate under a dearth of interest and lack of commercial launches, it’s an application that has come to symbolize the potential as well as the failure of what once was considered a gold mine.
“I think (the carriers) are focused on other things” besides LBS applications, said Jeffrey Rickard, wireless industry analyst at research and consulting firm Current Analysis. “There isn’t much interest in data services yet.”
“It’s going to be a limited market at first, to be sure,” said Dana Thorat, a senior analyst in IDC’s wireless and mobile communications program.
Although there is little activity on the location-services front, the market isn’t completely defunct. Indeed, the LBS market leader in the United States, AT&T Wireless Services Inc., recently announced an expanded set of location applications.
“We do think there is a lot of potential here,” said AT&T Wireless spokeswoman Danielle Perry.
The carrier last year introduced perhaps the nation’s first consumer location application, its Find Friends offering. The application allows users to track the location of other AWS friends and family, as long as they agree to have their position tapped. The service works through information gleaned from the carrier’s cell sites, which provide only general proximity information and not details specific enough to meet the Federal Communications Commission’s E911 mandate.
And last week AWS expanded its location portfolio with a number of new applications in conjunction with the launch of its new XHTML mMode service. AWS is offering location information to its content partners, and Zagat.com, Match.com and other sites plan to add location aspects to their services. Indeed, AWS plans to sell a My Five Nearby application that will allow users to search for local restaurants, ATMs and other locales.
“There has been, until now, a very limited number of applications,” AWS’ Perry said.
Another carrier active in the location-services market is Nextel Communications Inc., which sells a variety of GPS-capable handsets. The phones can provide information much more detailed than AWS’ cell-site technology. Indeed, Nextel’s GPS-capable i730 phone sells with TeleNav and Way-to-Go, applications that provide mapping and driving directions. The carrier also offers its branded Mobile Locator, which allows small business owners to keep tabs on their employees. Nextel also sells a fleet tracking service from @Road Inc., as do several other wireless carriers.
However, other U.S. carriers so far have preferred to say out of the LBS market. Sprint PCS and Verizon Wireless both sell GPS-capable phones, but both carriers offer few commercial location applications.
“I don’t know that we necessarily see the demand for that right now,” said Jenny Stevens, a spokeswoman for Sprint.
“Verizon Wireless is focused 100 percent on location 911 calls,” said Jeffrey Nelson, a Verizon Wireless spokesman. “At the end of the day, that’s the LBS service that matters the most.”
Although there is some movement in the location services market in the United States, it is nothing like what was hoped for in the burgeoning days of wireless data. The FCC’s E911 mandate requires wireless carriers to install technology that can locate users when they dial emergency services, and the ruling initially was intended to go into effect in 2001. The mandate sparked interest from a variety of wireless startups, which saw the ruling as assurance that LBS technology would be introduced. Industry hopefuls exalted the Starbucks-coupon application as a beacon for the market’s potential, and it became a standard topic of discussion at trade shows.
However, a combination of market forces conspired to slow the location-service market to a crawl, and as a result several location technology vendors have been forced to fold or move to other markets. MapInfo Corp., Televigation Inc. and others have had to rework their business plans following carrier apathy.
There are several reasons behind the stagnation in the market. Location-services technology in many cases is not as mature as wireless carriers would like. Also, full-blown location applications-like location-sensitive Starbucks coupons-necessitate the cooperation of a variety of players, from users to carriers to content providers. Also, some believe the benefits of LBS applications are still unclear-Starbucks coupons included.
“I haven’t seen talk of an application that would really make me pay for it,” said Current Analysis’ Rickard. “I’m trying to rack my brain for a compelling application, and I just can’t.”
But perhaps the most serious reason behind the sluggish LBS market is the very thing that sparked it in the first place-the FCC’s E911 mandate. Although the FCC ruled that wireless E911 services should be available by 2001, a series of business and technology issues have conspired to delay E911 implementations for the foreseeable future. Carriers have run up against technology implementation troubles, and public-safety agencies have been slow to implement the necessary system changes to locate wireless callers.
Thus, some carriers are hesitant to offer LBS applications to their subscribers since they cannot guarantee that E911 services will work. It would be a “PR nightmare” to promote location applications while leaving out E911 services, according to one industry insider.
Nevertheless, there are still wireless companies selling location technologies, and there are still content developers hoping to score big with location applications. As one longtime wireless veteran said, “if anyone tells you they can do something, they’re probably right. But they’ll probably be wrong about the time frame.”
“People are still bringing it up,” said IDC’s Thorat. “I don’t think it’s gone.”
