Are you local?

Russell Buckley

Back in the late 90’s, when services based on location for the next generation of mobile phones were first mooted commercially there was a great deal of excitement. Being able to locate everyone’s mobile phone in real time should, in theory, enable hundreds of compelling, new applications to launch. Or such was the received wisdom of the telecoms industry.

Seven years later, the market for what came to be known as Location Based Services (LBS) has only truly taken off in the area of Business-to-Business – navigation, fleet and asset tracking - which is thriving and is already a multi-million dollar industry. But the market for other applications, so enthusiastically promoted a few years ago, seems to have stalled. Why?

In the consumer sector, operators simply don’t prioritise LBS, preferring to focus on proven revenue streams, like SMS and ringtones. But unless successful applications can be launched, there’s a real danger that LBS using operator networks will never happen.

The first LBS applications were technology-led concepts. “If we build it, people will use it and pay to use it” the thinking goes. This led to flawed concepts like nervous parents tracking children, “Find my nearest X” and the Starbucks Scenario. Let’s briefly look at why these ideas fail.

Child tracking sounds great. Concerned parents (that makes all of them) can trace their child if she’s abducted and older kids’ locations can be monitored to make sure they’re where they’re meant to be. Unfortunately, these products don’t deliver. Abductors seem to know that phones can track their location and throw them away. And kids who want to avoid the parental big brother quickly become adept at making sure their phone is where they themselves are meant to be, while they’re off partying – often with a second phone kept for that purpose or a borrowed one.

“Find my nearest x” (ATM, gas station, Chinese restaurant) tends to fail as most people, most of the time, know the area they’re in pretty well. Or it’s simply easier to ask a real person if you don’t know.

The Starbucks scenario is where you’re walking past a Starbucks and they send you an SMS offering a discounted latte. While the principle of this idea is very attractive for consumers and promoters, a simple look at the economics of messaging shows that it would never pay for a low-transaction retailer to use this application.

Mobile marketing for higher value items, on the other hand, can make a lot of sense. This is especially applicable for entertainment venues (such cinema, theatres and sports events), restaurants, fashion and music.

So, what might work? As usual, the true innovation in this sector is happening outside the operators’ influence and that’s where the clues to future successes might be.

The key seems to be less obvious applications that bring the real world and the digital one closer together to form the seamless new reality.

Dodgeball, for instance, is a New York service that has successfully combined social networking (this year’s hot VC investment) with location. While it’s great to network with people all over the world, it’s arguably much better if you can actually meet up with them.

Thus, Dodgeball allows users to poll the area for friends and/or “friends of friends” (who have allowed their details to be published) and browse their details digitally. They can then meet up for a drink, a chat or even arrange a date with people who, as Dodgeball indicates, are already close by and available.

This theme of “real world meets virtual”, is further developed by the Yellow Arrow project, also in New York. People are invited to stick a Yellow Arrow on an object or at a location, about which they have something to say. This might be an arty poem or doggerel or it might be something factual. Perhaps a celebrity lived at a particular house or a note is left about a rare wild flower growing by a drainpipe.

Once the Yellow Arrow is physically positioned, future visitors can SMS the number printed on the arrow and receive the relevant information.

If you project this idea into the future it’s conceivable that we would have a swathe of digital graffiti to enrich our environment. It would be both non-polluting and not even visible.

The physical markers would eventually be replaced by location-based markers. Your phone would alert you (if you wanted it to) to the presence of something to see or read.

Imagine, for instance, visiting a lecture theatre where your phone allows you to browse and see recent lectures, perhaps presented by the original lecturer in hologram form. Or a restaurant that might have previous visitors’ reviews and comments appended to it digitally. Already people are accessing the content via some basic mobile services, but with true LBS the process would be seamless.

There are many issues to be resolved with this idea, not the least of which is, who is responsible for the quality and accuracy of the information?

These are just two examples of innovation designed with the user in mind. All technology takes longer to be accepted by users than we think. LBS is no exception. Now we have some user-led applications, it could start to slowly take hold and flourish.

Russell writes The Mobile Weblog