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We think a perfect storm is brewing that will see location-based services take off in a big way in 2009 and 2010. It’s already taken off on the portable navigation device (PND), but now it’s happening on your mobile. smart phones

What are location-based services? The best known example would be your Garmin or TomTom driving navigation. But that’s a very basic example. LBS can include things like Buddy Beacon where you can track where your friends are, locate someone for 911 emergency response, find the best restaurants near you, etc.

Here are some recent events leading up to the big storm:

• Mature PND market. The portable navigation device (PND) market is mature. In 2008, 50 million units were shipped.
• PND creators need new sources of income. Since the PND market is mature, consolidations are taking place and margins are now slim. PND manufacturers proactively try to apply their technologies to increase their revenue stream from other sources. The Garmin nuviFone is a good example.
• Users understand LBS. Location-based services are gaining customer acceptance in the market, with services like VZNavigator and a host of location-based apps on the iPhone.
• Technological Development Leasing. While traditional GPS chips require a long first time to fix, Assisted GPS (A-GPS) uses cell towers for triangulation to shorten fix times. This translates into a much better user experience.
• GPS chips are cheap. The mature market for PND has reduced GPS chips. Today, a GPS chip can be added to a smartphone for less than $1 USD. Virtually all smartphones shipped in 2009 will have built-in GPS or A-GPS.
• Amazing growth of smartphones. Mobile phones are becoming more sophisticated and can now access the web with a very reasonable user experience. While the overall mobile phone market grew by only 11% in 2007, the smartphone segment grew by more than 50%. It’s the new frontier for all the big companies to compete for ad dollars as there will be more smartphones in use than PCs and laptops combined.

So what does it all mean? It means that we will see an acceleration of innovation in both hardware and software in the coming years. iPhone and Android-based phones are leading the charge in making location-based apps and services more mainstream. Consumers will also get more used to them as new innovations address privacy and location management issues. To read more about location-based services and other mobile computing topics, visit us at http://www.skratchboard.com.

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