On 14^th December 2011 location based service (LBS) provider TeleNav announced the availability of its HTML5 browser based GPS navigation service for a limited number of developers. The service will enable bricks and mortar retailers in the US to integrate navigation features onto its mobile website. Many retailers provide a map of business location on their websites, but this goes a stage further, allowing consumers with GPS enabled phones to access voice-guided directions to the merchant without needing to fire up a separate application. TeleNav aims to provide this capability for free, and there appears to be few barriers to entry for retailers.

 

Google employed a similar approach on the fixed internet, by making static maps available to almost anyone to embed onto websites for free. Google encouraged these users to build services on top of its maps. This free map strategy significantly boosted the presence and use of Google Maps online.

 

By making navigation available for free TeleNav aims to drive the availability of both its maps and voice navigation service on the mobile web, supplanting Google and other online map providers like Microsoft/ Nokia. With mobile generating 10% of website traffic for some retailers providing navigation in addition to maps for free is likely to be a no brainer!  Moving forward, I expect TeleNav will aim to monetize free navigation in a similar manner to Google. Google has segmented the market and only charges businesses leveraging Google Map APIs within a pay wall environment, for business-to-business use, or within the confines of an intranet.

 

Although this is undoubtedly a smart move by TeleNav, I expect it will be unlikely to replace the adoption of Google Maps or Nokia Maps APIs by businesses:

 

Both Google and Nokia will likely monitor the speed at which TeleNav’s free map and navigation services take off, and respond by replicating the offer.

Furthermore, although HTML5 supports offline mode, which allows an application to cache data for use when the handset is not connected to the network, I’m certain the user experience is likely to be compromised. That is exactly what this limited trial will aim to tease out!

One message I've consistently been hearing from Nokia over the last two years has been that all of the different Ovi services will somehow combine together to make something wonderful that would "delight users" (their words). Nokia never gave any concrete examples, and I was starting to think that this was simply vaporware - but now that all the services are together and under the same Ovi banner, there is some magic starting to happen. The Nokia Gig Finder application genuinely impressed me at this year's Nokia World. The premise is simple - but then aren't all the best ideas? The Gig Finder app looks at the music you have on your phone, checks your location, and then suggests up-coming gigs for you. You can buy tickets directly, message your friends about it, save the gig on your calendar, get directions to the gig and listen to some more music from the artist to get you in the mood for the gig as well!. Music, Maps, Billing, Messaging, Social Networking and the phone's Calendar all coming together - which sounds like it should be far too complex for the user but in fact the app is remarkably simple and intuitive. All of the technical stuff is hidden and it is the complex integration of services at the back-end and the single sign-in (which has taken Nokia over a year to achieve across its Ovi suite) which makes this sort of stuff possible. An interesting, innovative, compelling, useful app which is greater than the sum of its parts - and with a developer community numbering over 3 million, I'm hoping to see more innovation like this emerging out of the Nokia ecosystem. As Thomas Edison said, "genius is 1% inspiration and 99% perspiration". After the years of talk, they needed something to prove there can be an end product. I'm sure there has been plenty of perspiration behind the scenes at Nokia as they rolled out and integrated these services, at last that 1% inspiration is starting to show. Related reports: Nokia Opens Up To Innovation - David MacQueen

Is there any benefit for Vodafone making its LBS software open source? I’m sure developers will love to get their hands on this code and use it to develop appealing location enhanced applications. But other than attracting developers to write compelling location services that can be distributed through Vodafone’s 360 application store, the move surely falls short of Vodafone’s initial intentions after gobbling up Wayfinder in December 2008 for $29 million. Up until this point, Vodafone had been the only carrier to have acquired a location based service application developer in an attempt to move into other parts of the LBS value-chain beyond providing user location and managing subscriber privacy. Vodafone decided to close down Wayfinder in March 2010, after Google and then Nokia launched free mobile navigation in December 2009 and February 2010 respectively, eroding Vodafone’s prospects of charging a premium for Vodafone Navigator, its turn-by-turn location application. Prior to this open source announcement, it seems likely that Vodafone would have attempted to sell the unit. However, given the shift to a free business model for navigation, I strongly suspect that interest would have been very low. Although maps will continue to work on Vodafone 360 Samsung H1 and M1 devices, its branded search application, Vodafone Locate, will be discontinued. Vodafone Locate is no longer available in the iTunes App Store or the 360 Apps Shop, nor has it been embedded in devices since Vodafone announced the intended closure of Wayfinder. Vodafone Navigation is also being phased out, with a final decision on when and how to be made. Vodafone Navigation is no longer available in the 360 Apps Shop, nor has it been embedded on any devices since Vodafone announced the intended closure of Wayfinder. Vodafone will now offer navigation through a partner, a more profitable approach to running their own navigation service, as highlighted in our report ‘Nokia & Google Shake Up $3.8 B Handset Navigation Market.’ This withdrawal by Vodaofne underlines the broader challenge that operators face in competing on services with internet giants like Google, whose business model is based on advertising and handset vendors, like Nokia, Apple and RIM that recognise the importance of delivering well integrated services in order to drive further growth in handset market share. Nitesh Patel

Today, Nokia announced the inclusion of free turn by turn navigation on ten phone models – further enhancing Ovi’s value proposition. The service, which is almost certainly to be seen as a fast follower to Google’s similar launch in late 2009 should in fact be viewed as pushing an industry on the precipice over the edge. But the question is – does turn by turn even matter? From purely a platform perspective – yes, for now. For others such as Apple to follow suit they will need map data, turn by turn licensing agreements, an acquisition perhaps, or take a hit on margins. While Apple may find a way to bring turn by turn to the iPhone in short order, Nokia and Google have laid down the gauntlet by using maps as a competitive differentiator, a difference the companies must hammer home while the advantage is theirs. The proprietary ownership of mapping data is a huge advantage for Nokia (Navteq) and Google. There is a famous saying, wherever you go – there you are. But such antiquated logic demands an update and today we would be trite not to say, wherever you are - there your phone is. If you are not yet prepared to accept this reality you should peruse Yelp, foursquare, Loopt, Aka-Aki, Gree or Gowalla and you will clearly see that the future of mobile is not only about where you are but where you are going. By enabling turn by turn navigation on its devices both Google and Nokia have assured developers that location based services will be available to those seeking to include them in applications while making location based advertising easier. Nokia has two advantages over Google. Firstly its scale - S60 devices are ahead of Android devices, for now at least. Secondly, its navigation solution resides primarily on the device, not on the network. For users who travel internationally and don’t want to pay roaming charges, those with spotty coverage, or those who don’t want a data plan this is a huge advantage. For carriers hoping to offload some network congestion this approach is a relief. Of course, it's threat to carriers hoping to bundle TBT for an additional cost. For consumers (primarily those that do not own stock in a GPS manufacturer) this is a big win. For Nokia, "free" is a significant improvement on its current proposition but the company will have to do more in the long term to be seen as an innovator and not a fast follower. Despite the momentum building towards turn by turn navigation the features are simply a means towards a longer term end. Knowing where people are, where they are going, and how they are getting there is incredibly valuable information and could lead to a plethora of new advertising opportunities in addition to new applications. Related research: Nokia strides forward in online location and navigation Location based services, opportunities within an emerging battleground -Josh M

Today, Nokia announced the inclusion of free turn by turn navigation on ten phone models – further enhancing Ovi’s value proposition. The service, which is almost certainly to be seen as a fast follower to Google’s similar launch in late 2009 should in fact be viewed as pushing an industry on the precipice over the edge. But the question is – does turn by turn even matter? From purely a platform perspective – yes, for now. For others such as Apple to follow suit they will need map data, turn by turn licensing agreements, an acquisition perhaps, or take a hit on margins. While Apple may find a way to bring turn by turn to the iPhone in short order, Nokia and Google have laid down the gauntlet by using maps as a competitive differentiator, a difference the companies must hammer home while the advantage is theirs. The proprietary ownership of mapping data is a huge advantage for Nokia (Navteq) and Google. There is a famous saying, wherever you go – there you are. But such antiquated logic demands an update and today we would be trite not to say, wherever you are - there your phone is. If you are not yet prepared to accept this reality you should peruse Yelp, foursquare, Loopt, Aka-Aki, Gree or Gowalla and you will clearly see that the future of mobile is not only about where you are but where you are going. By enabling turn by turn navigation on its devices both Google and Nokia have assured developers that location based services will be available to those seeking to include them in applications while making location based advertising easier. Nokia has two advantages over Google. Firstly its scale - S60 devices are ahead of Android devices, for now at least. Secondly, its navigation solution resides primarily on the device, not on the network. For users who travel internationally and don’t want to pay roaming charges, those with spotty coverage, or those who don’t want a data plan this is a huge advantage. For carriers hoping to offload some network congestion this approach is a relief. Of course, it's threat to carriers hoping to bundle TBT for an additional cost. For consumers (primarily those that do not own stock in a GPS manufacturer) this is a big win. For Nokia, "free" is a significant improvement on its current proposition but the company will have to do more in the long term to be seen as an innovator and not a fast follower. Despite the momentum building towards turn by turn navigation the features are simply a means towards a longer term end. Knowing where people are, where they are going, and how they are getting there is incredibly valuable information and could lead to a plethora of new advertising opportunities in addition to new applications. Related research: Nokia strides forward in online location and navigation Location based services, opportunities within an emerging battleground -Josh M

Spiderman (née Peter Parker) and Harry Obsorne. Julius Caesar and Marcus Brutus. Apple and Google. Each of these great friendships inevitably turned into a rivalry. The battle for the consumer’s mobile soul became more complicated on January 20th as rumors abounded that further acrimony between Apple and Google, the former bunkmates, has led Apple to consider Microsoft’s Bing as the iPhone’s default search engine. Take a moment to let that sink in. Apple partnering with its rival Microsoft – certainly with noses tightly clenched - to challenge the enemy du jour, Google. The mobile market certainly makes for strange bedfellows. Beyond just posturing, the possibility of Bing coming to the iPhone shows Apple is serious about its divorce from Google but it could just be an interim step for greater Apple control of its platforms. 1. Google Services. A number of iPhone users – unwilling to pay the annual fee for MobileMe use Google services, particularly Google Sync to keep e-mail, contacts, and calendars always up to date from iPhone to cloud to computer. If Apple is serious about limiting Google’s footprint they should make MobileMe free and hasten the conversion of Google users to MobileMe users. Failure to do so, combined with the possibility of greater disconnection from Google services could convince some Google users to adopt Android. But a free MobileMe not only prevents this, it gets users further invested in the Apple ecosystem. 2. Apple Control. Maps. Search. The processor. Streaming music. Apple still partners with a number of companies for its device and service, but it has also been on an acquisition binge. Could this be the beginning of greater control for Apple to ensure a wholly differentiated experience? Acquisitions of PA Semi, Lala, PlaceBase, and Quattro certainly indicate it more Apple control could be the future. Could an Apple search engine even be on the horizon? 3. The Tablet and other platforms. All service/OS providers want greater control over the user experience. Google is releasing an entire OS, Chrome, to extend its control to more platforms. Apple will not want to cede valuable property on iPhone, iPod Touch, or the iPad/iTablet/iSlate/iTenInchOLEDTouchscreenMacBookTouchPro. Looking at the broader picture – offering improved embedded services such as Maps while also allowing users to download other best of breed applications will ensure an improved, but differentiated experience. It seems therefore that partnering with Bing could be an interim step, another defensive move to relinquish any lingering grip Google has on the ‘out of the box’ Apple platform and eventually lead to a more wholly Apple experience and an improvement to the Apple ecosystem. But if Apple doubles down with its own services it must remember an important lesson Spiderman was once taught before he could defeat Harry Osborne’s Green Goblin – with great power comes great responsibility. -Josh Martin

Afte the inevitable wave of irrational exuberance has come the equally inevitable correction and flow of negative comments regarding Google Nexus One.

• We are now seeing a huge rebound of criticisms about customer service, implementation and execution, moaning and complaining for existing t-mobile customers who have to pay more than a new customer to get a cool device and strong complaints from developers about availability of SDK and support.
•  Naturally, the questions about Google's ability to execute on direct sales are being raised but these shall pass very quickly in our view.

Within our wireless team we had divergent opinions from network centric, application focussed and device driven analysts but ultimatlely we arrived at the following key perspectives:

• Consensus is that Nexus will be successful by high end tier Smartphone levels (single digit volumes in 2010 but upside potential when it rolls out beyond TMO in US and to more open markets in Europe). Nexus is likely to sell more through operator channels than direct overall. Handset volume though is not the metric by which Google will measure Nexus success nor should operators as Nexus sales are a means to an end.  If Google is successful and Nexus ends up driving usage and value for operators, they will support it with subsidies.  Otherwise, operators can passively watch Google evolve its own-branded offering with little to lose. Tier One handset vendors (SAM, LG) may have the most to lose as Google’s marketing muscle and brand coupled with compelling devices and experiences will be a strong competitor for Operator slots, subsidy dollars.

• Handset revenues and profits are a nice to have for Google. Key to their success and long term ambition is too boost the mobile browsing ecosystem. More open devices capable of browsing/search/maps from Google or others is positive for Google.  Google needed to update and get close to parity in terms of an engaging, fun, easy browsing UI with competitive links to key apps like maps, media etc and this device achieves that goal. Google is great at creating a buzz and the media is ready to talk about something other than Apple.

• Google Nexus and indeed the whole Android approach is not about controlling/owning the user (contrast this with Apple). Google’s key metric is advertising revenue. Google's vision is well publicized: the browser is how they will deliver services, even on mobile, and apps are a stop-gap measure as far as Google's strategic vision is concerned. Google is banking on HTML 5 as their solution to fragmentation but we believe they are drinking too much of their own coolaid here and underestimating the importance of apps. Google’s key goal is to increase eyeballs and advertising.

• Some key elements that have not been addressed which we believe are key in Google’s future evolution and will be key to watch relate to Voice and what Google does its Gizmo5 acquisition to push Google Voice into a full VoIP proposition. This is where Telcos should be most worried and where we have yet to see all the pieces positioned on the battlefiled.

In many ways, convergence between online and mobile is already here. For some types of content, convergence with mobile was something that just happened. Take music; as soon as phones became music players, “convergence” was already in place. Strategy Analytics’ consumer research shows 83% of Western Europeans and Americans have used their phone as a music player, with 37% using the devices as their regular portable music player (although only 6% have actually purchased music on their phone, but that’s a different story… see Can Nokia Challenge Apple's Digital Music Dominance).  For media companies and internet brands, it’s no longer about whether or not they should have a mobile presence, but rather what form that mobile presence takes. An optimized web page? An app in the App Store? A deal with an operator? These are all options, sure, but for me it’s a shame that most of the discussion around convergence is simply about making the same content available on the mobile device. Rather than focus on convergence, which is clearly the direction media markets are heading (if they haven’t already arrived, as in the case of music), I’d like to look instead at what I see as step 2 – divergence. By divergence, what do I mean? I’m talking about the unique factors of mobile; what is it that makes the mobile environment different, and how can that be used to provide a better user experience - and thus, ultimately, greater revenues? Yes, there is a smaller screen size, lower processing power, and of course a mobile experience has to be designed around these limiting factors, but there are also some strongly positive characteristics about mobile usage which can actually be used to improve the experience. One of the first things that people might expect me to talk about here is the idea of targeted advertising. However, I’m not going to go down that route – aside from the fact that you’ve almost certainly heard it all before, targeted advertising is not something that enhances the user experience. It’s simply a tool to attempt to generate slightly higher advertising revenues. I’m not talking about the content either – made for mobile content has rarely been popular, and it seems that what consumers want is traditional content. So what am I talking about? It’s the experience, not the content, which has to be “made for mobile”. An example of a media type where mobile actually adds something new is social networking. The constantly updating nature of social networks along with the “always on, always with you” nature of the mobile phone is a match made in heaven. Strategy Analytics conducted a survey of MySpace users, and found that more users accessed MySpace Mobile daily than the main MySpace.com website. With such high levels of mobile usage, it seems remarkable that the most popular social networks (MySpace and facebook) have yet to monetize this traffic. Usage patterns were quite different – sessions were shorter and tended to be limited to status updates and comments (see Mobile Social Networking - Strategies for Success ). Mobile isn’t exactly converging with online, it’s diverging – mobile will become the main use case for social networks, and the usage will be different from how it has been in the online world. To make the most of this opportunity, social networks need to think about how mobile is different, not just simply try and replicate the desktop experience on mobile. Context is another way in which mobile is very different from online. If I’m accessing a website from my desktop, I am at my desk. If I’m accessing a website from my mobile, I could be anywhere, and the place I am at matters. Taking a simple example, if I’m in town and I’m searching for a movie, I almost certainly want cinema listings close to where I am located. I’m unlikely to want to go to the movie’s own website, or the IMDB page (typically these will be the top 2 search results). Location clearly matters, and this is why both Nokia and Google have been investing so heavily in maps products. Google has a huge head-start online, as not only are Google Maps available through Google's own web properties, they are available on many other websites. This has given Google a 44% share of the local search market (comScore, July 2008). In terms of handsets, Nokia has something of a lead as it pre-installs Ovi Maps on Nokia smartphones. In just 3 years, Nokia went from being non-existent in this market to being the world’s largest manufacturer of GPS devices. The location capabilities of phones add divergence from the fixed, online world – optimizing search results for my location is one way to really enhance the user experience, but it has the potential to add all sorts of richness to other media (see Nokia Strides Forward in Online Location and Navigation and Crowd Sourcing Model to Disrupt Premium Mobile Navigation Market) Take social networking, where as I discussed earlier, mobile is already driving usage. Nokia announced a deal with facebook, and facebook users with Ovi Maps on their device can now post their location. Users can tag photographs uploaded from phones with GPS coordinates. There’s really quite a number of ways in which the mobile experience can actually add something new and I really believe that these early examples are just the tip of the iceberg. Now that people can access the same content online and on mobile (and the iPhone has proven that) we already have convergence. What is going to be exciting to watch, and where we’ll see the really exciting innovation, is actually the divergence of mobile. - David MacQueen, Director, Wireless Media Strategies

News in a nutshell:

- Co-developed Android devices which will include Google apps, and will also be open to 3rd party apps

- Devices will include Android Marketplace (App store), Google Maps, YouTube, and Google Voice (VoIP)

- 2 devices initially to be launch in next few weeks

- Did not mention who is actually making the hardware, except to say that it's not Google

- Does not necessarily impact strategy with other devices/OS, Verizon Wireless (VZW) will still have plenty of other devices/OS in portfolio

You could feel the love on the conference call between VZW and Google. I bet Microsoft is not feeling the love, however; they paid VZW $550m in guarantees to be Verizon's search partner.

With this deal, VZW has opened the door for device/OS vendors to put their own content and services on the handset, a significant shift in strategy from its previous "walled garden", VCast-only services environment for feature phones. Although VWZ has to date exerted less control over smartphones in its portfolio, e.g. its customers can buy Blackberry smartphones or a number of Windows Mobile powered devices with no restrictions to getting third-party applications and content onto those devices, it has been able to tolerate this while those devices have accounted for a relatively small volume of sales. However, with the smartphone installed base forecast set to reach 170 million in North America (47% cellular user penetration) by 2013, VZW has clearly felt the need to exert some degree of control, rather than allow vendors to run the show entirely.

It's not as simple as open versus closed, but rather that there are degrees of openness, and through this agreement Verizon has definitely opened the door further. It's like opening Pandora's box, though, and there's no shutting it again.

 

As guest speakers David Kerr and I have just returned from the the inaugural Metaplaces location based services conference in San Jose 22nd-23rd September 2009. The event was attended by companies across the LBS value-chain. Among others, content providers such as Inrix, USA Today, WCities; Digital mapping companies Tele Atlas, Navteq, Waze, Open Streetmap; LBS application publishers uLocate, Wavemarket, Loopt, Google; LBS solution vendors Openwave, Sense Networks, 1020 Placecast, and Qualcomm. Notably, there was an absence of operators and advertisers, with only US carrier MetroPCS and Publicis representing respectively. The fact that so few carriers were in attendance underlines why they are losing their position in LBS, yes pun intended sadly, and suggests that LBS remains off their list of priorities.  

The three main standouts for this event for us were:

1. Waze: We were most impressed by the social digital mapping company Waze, who proclaimed it has recently expanded its application to Symbian and Windows Mobile platforms, and has just reached a critical mass of 160,000 users in Israel. Waze offers a free turn-by-turn (TBT) navigation application based on digitized census map data. This basic map is being constantly improved by a community of users whom allow their handsets to be tracked as they drive. Further user participation involves users actively annotating details to the map (e.g. notifying Waze of new roads, new one-way signs and changes to traffic flows, etc within the application). Making the process of user feedback as pain free as possible is clearly imperative to enhance participation levels. Overall, the model relies on an appealing trade off. Firstly, the user gets a free TBT application, and their incentive to improve the map and offer information is that their free TBT application will improve further in quality. Secondly, the benefit for Waze is rather than invest billions of dollars to collect map data, a la Nokia, its community is doing so on its behalf. According to Waze 1% of cellular users per market is sufficient. Armed with an improving digital map Waze can to some extent compete with TeleAtlas and Navteq in licensing of digital map data. Everyone is a winner, and although the quality of the maps are unlikely to compete with Tele Atlas or Navteq, the success of Wikipedia underlines the potential of user or community generated content.   
2. Uncertainty around monetization: We were looking forward hearing case studies about how companies had started to use location data to make money - the tag line for the event was 'How to Monetize Location Data & Services,' so can you blame us? Despite numerous innovative ideas about how location can be used, it is clear that most players in the LBS industry are still trying to figure out what business models will prevail, and many are pinning their hopes on advertising. There's little disputing that user location data can improve ad targeting if cleverly combined with other relevant data about the consumer. However, Sense Networks claims to have gone a step further. Its analytical tools allow it to categorize cellular users into classic (and not so classic) consumer segments based on tracking their movements over the course of a few months. This solution clearly addresses the problem that carriers have collecting data about their prepaid customer bases, and kills two birds with one stone. Firstly, carriers with large prepaid subscriber bases (in markets like Italy and many emerging markets) can learn more about their customers and adjust their own service marketing accordingly. Secondly, carriers with ambitions of becoming a smart pipe are in a stronger position to provide consumer targeting information to advertisers. Oh yes, as you'd expect, discussion about privacy implications was a key feature during the entire conference.      
3. US carrier bottleneck: US operators remain a bottle neck to location based service availability. While owners of smartphones integrated with GPS are able to use the rising number of location enabled applications that are available through vendor application stores, the majority of non-smartphone users are restricted to the services the carriers make available through their portals. To provide an example of how slowly US operators are moving regional US cellular operator MetroPCS is only just about to make location look ups available to third party applications that are distributed through its portal. It is yet to consider opening up user look ups on a wholesale basis. While US operators continue to guard the location data of their customers, carriers will continue to fall behind and LBS innovation will continue without them.

While innovation continues in the LBS sector, mainly outside the carrier channel, the unanswered question remains - where is the money?