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The Enormous Promise of Location

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Location, one of the hottest segments in mobile, is a key component not just in navigation apps but also social offerings such as Foursquare, Google Buzz and even Twitter. The nascent space still has plenty of wrinkles to iron out, of course, including thorny privacy concerns and the technical shortcomings of GPS and other positioning technologies. But even though some business models have yet to emerge, there’s plenty of opportunity in mobile location. And there will be for quite some time.

That’s one of the takeaways from our GigaOM Bunker Series event this week (watch the video here) that looked at some of the challenges and possibilities in mobile location. Unlike some other white-hot segments in high tech, location is a wide-open field with relatively few legitimate players, said GeoDelic’s Rahul Sonnad.

“There’s only a handful of quality location companies out there,” Sonnad said during a panel discussion on location business models. “This market is in a hyper-expansive, universe-type mode. I think even for newer people coming in, you’re going to get this massive new market and, if you have something that works properly, you can get traction.”

Here’s a look at several specific opportunities discussed at the event:

The App Revolution: As hot as location is now, it’s positioned to explode in the near term as new applications come to market and more users become willing to share their whereabouts via the handset. Foursquare, for instance, remains a forum for early adopters to advertise where they’re eating or what their favorite nightclubs are –- a pretty slim value proposition for most of us, to be sure. But as mobile social networks gain popularity, they enable users to instantly form communities based on location.

Augmented Reality: Augmented reality (AR) is currently a novelty but holds enormous promise as a way for users to access information about their surroundings with applications that use location information to deliver web-based content to end users. The emergence of AR will usher in a host of new applications and services, from local search offerings (which are already coming to market) to mobile games and other forms of entertainment.

Vertical Markets: Some vertical markets are fertile territory for location-based applications. Developers hoping to leverage location should consider building health and fitness apps that could combine location information with vital statistics, enabling users to track how their bodies respond to workout routines. Retailers, too, can leverage location not just to woo potential customers nearby but also to deliver sales information and other content to boost revenues and create customer stickiness.

Improving Accuracy & Specificity: Michael Liebhold, of the Institute for the Future, bemoaned the inability of GPS to pinpoint location close than 10-20 meters or to locate users indoors. That lack of precision can be partially mitigated by leveraging the positioning of other technologies (including cell networks and Wi-Fi), but more accurate positioning could open the door for a host of more targeted offerings. Other participants spoke of a lack of the kind of geodata that could be used both to identify specific places (such as GigaOM’s offices, which are on the fourth floor of the building) and to provide location-based histories (such as every important event that occurred at a specific address).

Other hurdles will surely emerge as location moves further into the mainstream and becomes a component of a wide variety of apps and services. But if 2010 is truly the year of location, as Om predicts, it will only provide a taste of what we’ll see in the coming years. And that means plenty of opportunity for developers and everyone else looking to tap the booming segment. Read my full analysis here.

Photo by Flickr user Rubin110.

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6 Responses to “The Enormous Promise of Location”

  1. Re: improving GPS… the iPhone and many other smart phones use Wi-fi positioning (Skyhook is the primary provider) and GPS. WFP is usually much more accurate in locations where GPS either doesn’t work or is imprecise (indoors, urban canyons, etc.) – depends on the density of Wi-fi access points in the vicinity. Given its advantages, I think we will see many more phones equipped with this capability in the future.

    Wavemarket also recently introduced Veriplace, which allows developers to locate consumers with feature phones using the operators’ “cell tower lookup.” While less precise than GPS and WFP, it may be “good enough” for many location-based apps (e.g., coupons; location-based advertising; etc.) and dramatically expands the reachable market beyond those w/ smart phones.

  2. It’s no question that local is just emerging so there are quite a few opportunities. As a local business owner I love the idea of local, but there are more than a few things that need to be straightened out.

    The most important that I see right now is that we need to improve GPS capabilities. What if I am indoors? I live in a northern climate and 6 months out of the year are spent indoors. Then the whole idea is useless!