Nokia, Trimble Strike LBS Deal

While GPS-based cell phone applications have been hyped as “the next big thing” for years, Nokia and Trimble announced a licensing deal today that could actually give the location-based industry a much-needed boost. The companies say that they have struck a deal that gives Nokia exclusive access to Sunnyvale, California Trimble’s GPS-based technology for wireless consumer products and services, and Trimble gets a non-exclusive deal to use Nokia’s LBS patents. Other financial terms of the deal were not disclosed. Nokia has been making a big push on GPS/LBS and acquired gate5, a navigation system software maker from Germany earlier this year — maps are a big part of its new Nokia N95 phone.

At CTIA last month startups were pushing wireless location based applications like navigation, finding friends, and tracking employees. Last week ABI predicted the number of global LBS subscribers will reach 315 million by 2011, up from 12 million in 2006. But analysts were predicting similar numbers at the same time last year, and startups were shooting for LBS to hit the big time at the beginning of this year. Slow networks, simple handsets and cautious carriers have been keeping the LBS market in the U.S. at bay for years.

In other countries like Japan and South Korea, LBS applications like finding friends via GPS-embedded cell phone have found some success. Though startups in the U.S. are still trying to find the right combination. Loopt, backed by Sequoia and New Enterprise Associates, has launched a GPS-enabled social network application over Boost Mobile. When we tested out the application in the Bay Area, it was slow, and difficult to use, and of course only available for Boost subscribers. We can imagine a friend-finding LBS app like Loopt gaining traction in an environment like a college campus, but only when the experience is better (read faster) and available across more carriers.

A better business case for LBS applications will likely be found in corporations. Companies don’t worry as much about permission and privacy-based concerns, given employers can more easily track employees. Companies are also willing to pay a significant subscription to locate employees, while social applications have had trouble bringing in a high subscriber rates. Nextel has known this for years and was the first carrier in the U.S. to capitalize on the enterprise LBS market.