February 15, 2007 11:02 AM PST
Handset makers get in on location services
Nokia and Motorola, the No. 1 and No. 2 handset makers in the world, respectively, each introduced new products at the 3GSM World Congress here this week. In addition to adding new hardware products that will be able to receive signals from satellites to fix a subscriber's exact location, the companies have also introduced their own navigation services, which they plan to sell directly to consumers.
While the business models on these services vary slightly, it's clear these companies are no longer content to wait for mobile operators to begin offering their own location services.
"The GSM carriers in particular have slept a little bit when it comes to location services," said Javier de Salas, vice president of international business development for Global Locate, a GPS chipmaker. "And now the handset makers, like Nokia, are putting together the ecosystem themselves. So I think there will be some competition between them."
For several years the cellular phone industry has been talking about using global positioning satellite, or GPS, technology to help provide location services, such as turn-by-turn navigation, for cell phone users. But these services have been slow to roll out through most of the world.
Cell phone carriers using the CDMA (code division multiple access) standard have introduced handsets and services much faster than their GSM counterparts. Part of the reason is that embedding GPS technology into CDMA handsets is inherently easier and less expensive. But another major factor, at least in the United States, was a mandate from the Federal Communications Commission, which required carriers to add technology that would allow them to locate people in case of an emergency. As a result, all phones sold today through Verizon Wireless and Sprint Nextel have integrated GPS chips.
By contrast, GSM operators, which far outnumber CDMA operators on a worldwide basis, have struggled to introduce GPS handsets and location services. There are several reasons for this, including a lack of standards, expensive chipsets and a reluctance on the part of operators who still believe GPS technology doesn't provide accurate enough location fixes.
"European GSM operators were actually early adopters of location services," said Guylain Roy-MacHabee, CEO of RX Networks, a mobile positioning and services company. "Vodafone was very active at assessing location technology, but the promise of the technology didn't live up to expectations and the services flopped."
Finally the market is changing. A new standard for embedding GPS into GSM chips has been established. Prices on integrated chipsets are falling. And now carriers are envisioning new ways to use location services, such as for local search and mobile advertising.
As all the pieces fall into place, GSM operators will likely follow the lead of their CDMA counterparts who have already begun offering location services as a way to generate new streams of revenue. In the U.S. market, for example, Verizon Wireless charges users an additional $9.99 a month or $2.99 per day to use its navigation service. Mobile virtual network operators Boost, Helio and Disney Mobile offer tracking services. Boost charges $2.99 per month for its service.
But mobile operators aren't the only companies going after this market. Personal-navigation software companies like TomTom are already offering versions of their software for high-end smart phones.
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