Loopt helps reduce cost of location services
Loopt, the friend tracking software developer, has struck a licensing deal with a Qualcomm subsidiary to help lower the cost of providing location services.
The company will announce Thursday that it has signed an agreement with SnapTrack, a wholly owned subsidiary of Qualcomm, to use QPoint location-based server software to provide social mapping and other advanced location services.
Location-based services are expected to generate a lot of money for carriers in the future. Already, most major mobile operators are offering some kind of location-based service, such as GPS-enabled navigation or tracking. But the service hasn't taken off in any big way yet.
One of the main barriers has been the fact that the licensing fees on the GPS location information captured by the phone via the SnapTrack technology is very high. Today, carriers must pay at least a few pennies every time a location query is made. This may sound low, but it adds up. And it's a cost that is difficult to make up considering that most targeted location-based advertising generates less cash per query than the licensing fee, said Sam Altman, co-founder and CEO of Loopt.
"The cost structure for location based services has been out whack," he said. "That's one of the reasons that these services and location-based advertising haven't take off yet."
Under the new arrangement, Loopt will pay a flat fee per month per user, which provides unlimited location queries. This means than instead of paying a few cents for every query, the cost of discovering a location can be scaled back to tenths or hundredths of a cent depending on how many location queries a customer makes in a month.
This makes implementing location-based services much more affordable for carriers, who would like to generate revenue on these services through targeted advertising.
Loopt also plans to provide its location-based technology to other software developers, so that they can develop location-aware applications. The new licensing arrangement with Qualcomm will also allow these software developers to benefit from the Loopt-SnapTrack licensing deal.
Loopt already offers its friend-finding and alerts service to Verizon Wireless, Sprint, and Alltel. It also offers its application through Apple's iPhone App Store.
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
Let's focus: isn't Loopt's biggest challenge actually REVENUE (lack of users or even a credible business model for the users they DO have) and not COST at all? Isn't the Loopt service generally offered for FREE already (on Sprint, iPhone, etc)? How is cost holding anything back for them?
Look, I love the idea of being able to see where my friends are on my mobile phone. I really do. But Loopt has not cracked the code yet in terms of getting enough customers or getting PAID for the customers they do have. I'm skeptical that a branded mobile-social network ever will in the face of large existing social networks (Facebook, My Space, etc).
This feels like a meaningless "news" item and a distraction for a company that needs to focus on creating a legitimate business.
Can someone help me connect the dots? What am I missing here?
http://www.mywirelessnetwork.mywirelessrep.com/wireless_services.html
- by Rick Weld November 11, 2008 10:46 AM PST
- CNET: Your bias is showing--quite clearly.
- Like this Reply to this comment
-
(3 Comments)1. Interesting to note the story's omission of a key fact---Loopt is being sued by rival LBS provider Earthcomber in Chicago over patent ownership within this area. CNET publisher/Loopt pal Dan Farber is keenly aware of this, but chooses not to have his reporter include it in the story.
2. Loopt--as the other reader correctly notes--has not generated any significant revenue within this arena--even though others have. A point not lost on users.
Someone might want to wake up sleepy Mr. Farber and remind him that a long time ago--he held himself out as a journalist. Allowing such slanted bias PR nonesense to be published in a story without balance is becoming known as "pulling a Farber".
Sad, but unfortunately, all too true.