By the time location-based services were announced a few years ago, most industry players had begun to doubt LBS would ever arrive.
Two major events have revolutionised the industry :
- Nokia’s announced acquisition of Navteq in 2007 ;
- Apple’s launch of the iPhone with standard APIs for location-based applications.
The first event meant that the world would benefit from maps that are truly made for pedestrians, which is essential if services are to be delivered on mobile phones.
The second event put device manufacturers back in the driving seat. Until then, they were not allowed by mobile operators to develop a real strategy around services. This has now radically changed.
Following TomTom’s integrated service delivery model, the PND manufacturer now leverage its enormous installed base of devices to offer services. When developing new services, they benefit from significant economies of scale and worldwide partnership strategies with content and Internet players.
Moreover, two vendors even control their OS, i.e. Nokia with Symbian and Apple with the iPhone. This means that they now control all the key parts of the environment except the network, i.e. the application, the content and the service provision.
What are challenges faced by mobile phone vendors?
- Both Nokia and Apple will need to prove the business case for LBS (i.e. either revenues or significant differentiation), and deliver on it ;
- As LBS becomes common place, other players will need to define a credible response strategy.