Text messaging aggregators such as mBlox, OpenMarket and VeriSign Inc. have built lucrative businesses by serving as middlemen between carriers and companies (or political candidates) looking to send text messages to massive numbers of mobile users.
That’s exactly what Isaias Sudit wants to do with location information.
The CEO of Florida’s Loc-Aid Inc., Sudit joined the location-based services field 16 years ago in the telematics space. But it was the debut of assisted GPS – GPS that uses an assistance server to leverage both satellite and cellular location data – that lured him into mobile.
“We started playing with assisted GPS five or six years ago when it first started, and we realized that was where the future was going,” Sudit said last week. “But as we started doing apps on the platform we realized there was going to be a big gap. There was no standardized way to get location information from cellphones, plus carriers have different networks. So you, as a developer, had all these barriers to entry.”
That fragmentation – along with a cornucopia of other problems, including privacy issues and a lack of GPS-enabled handsets – has shackled a market that had been “the next big thing” since early this decade. But while many sectors of the mobile data market remain stagnant, location-aware services are finally getting legs. Sprint Nextel Corp. and Verizon Wireless have found success with their branded navigation offerings, and developers are scrambling to build offerings for Apple Inc.’s iPhone and other new high-end handsets.
Going social
Meanwhile, a host of mobile social networking communities are looking to tap the power of location. Loopt, a Silicon Valley-based startup that debuted with Boost Mobile two years ago, snared its third carrier-deck agreement earlier this year in a deal with Verizon Wireless. Competitors such as BrightKite, FireEagle, Pelago’s Whrrl and Useful Networks’ Sniff are expanding, also, vying for a piece of the location-aware, mobile-social-networking market ABI Research predicts will reach $3.3 billion and garner 82 million subscribers by 2013.
Loc-Aid pays carriers for their location information and, in turn, charges clients to help deploy their offerings. The 60-employee company is working with roughly 100 developers, Sudit said, including messaging companies and financial firms that hope to add a location component to existing offerings.
The startup currently claims only five carrier partners, although more are scheduled to be announced soon. And while operators have historically been terrified of sharing location information with their partners, they’ve become more open to the idea as location-based services have evolved.
“Until the end of 2007, sharing that information was a huge issue; people said the carriers will never open up,” Sudit explained. “But two things happened at the end of last year: CTIA came out with best practices, and based on that document a lot of the privacy concerns have been taken care of. The second part was that Google and others started to provide location information on handsets and applications. People are starting to use them, they think they’re cool, it’s not big brother, and so carriers are getting much more comfortable with this.”
Diverse market
Whether that means there’s room in the value chain for a go-between, though, is unclear. Loopt and uLocate, among a handful of others, appear to be gaining ground without the assistance of an aggregator. But Sudit sees opportunity in what promises to be a broad spectrum of players moving into location, from credit card companies looking to validate purchases at the sales counter to retailers hoping to ping potential customers as they near a store.
“You need to understand location before you get into this market. You need to understand that location comes in different flavors. Do you need a ZIP code or an exact address (for your campaign)? If you’re a messaging company, that’s not something you can learn overnight; it really takes a long time,” Sudit asserted. “Location is not going to have a killer app. I think location will be thousands, tens of thousands, of applications and services.”
