How Mobile Location Services Will Fade Into The Background

Iphone Locations

Location-based services have been around for quite some time but uptake has been slow: less than 20 percent of European consumers report that they own a mobile phone with GPS support according to the latest Forrester survey (a similar adoption rate to Americans when we asked the same question in the US in 2010). A minority of them actually report that they look up directions and maps on their mobile phones on a regular basis.

While our usage data suggests incomplete adoption, consumers will soon embrace these services. Now that most new smartphones are shipping with GPS support and that Google (NSDQ: GOOG) and Nokia (NYSE: NOK) offer maps and navigation services for free, we expect a majority of consumers to use these services in the coming years. As of May 2011, there were more than 200 million mobile installations of Google Maps, and the service is used 40 percent of the time via consumers’ smartphones.

In fact, it does not really matter. Why? Location is no longer a service like maps or navigation, but increasingly an enabler of new product experiences. In a nutshell, the very notion of location-based services doesn’t not mean much anymore as I outline in the new Forrester report, “Mobile Location Becomes Invisible:

–Location and maps are increasingly becoming features of new mobile products and services

–Location will happen automatically, behind the scenes. Think about the automatic weather update on your home screen widget. These adjustments happen automatically and, from a user perspective, invisibly. A growing number of applications will use geospatial information — without necessarily generating a map.

–Relevancy of local data will improve quickly. The era of basic point of interest (POI) information is over. This is no longer about just the address and the business name of a local shop. Enriching content with more accurate information on opening hours, real-time data (traffic information, coupons and promotions, etc.), product data, brand data, dynamic (review and promotion) data, and inventory data will deliver greater consumer benefits.

–New algorithms will bridge the physical and digital worlds. Coupling more accurate local data with user context and other sources of information will enable developers to create new algorithms bridging offline and online worlds.

–Such a new model, linking consumer behaviors with local data, will foster the development of crowdsourcing and predictive analysis. Think about predicting traffic congestion or air quality monitoring. Moving forward, these new algorithms will have far-reaching consequences far beyond mobile. There is tremendous value in knowing not just where customers are at a given moment of time but also where they are going and who they are in an aggregated and anonymous way.

Consumer product strategists should think beyond location alone but should couple this feature–which will be increasingly accurate, particularly indoors–with other data sources, such as user context and past behaviors.

However, invisibility will also raise privacy and identity fears. This will raise growing concerns about risks to lose personal information or to share location information with people and organizations you don’t want to have it.

I was not surprised to receive feedback from my contacts in Europe after publishing my previous post “The Future Of Mobile Is User-Context” where I mentioned that, in the long run, consumers will voluntarily give up privacy in exchange for the benefits of mobile convenience. Several people reached out to me directly saying this is a scary vision and that European consumers were way too concerned about their privacy to even think about “bargaining” it (in their own words).

So let me clarify a few points.

–First of all, I think the notion of privacy is interpreted very differently in different regions of the world. There is huge affect associated to it for political, historical and cultural reasons.

–Secondly, overcoming privacy concerns will not happen overnight. It will take time and will only happen if 1) consumers are in control 2) services delivered are really more personalized and convenient and 3) if a new ecosystem of trusted aggregators of data emerges.

–Thirdly, and on a more personal standpoint, I agree citizens should really care about this and make sure regulators have the resources they need to play their watchdog role.

Users need to be convinced that they can control their privacy whenever they want, regardless of whether they face a real risk or only think they do. They should also be able to: 1) choose the degree of personal information they share with their different social contacts; 2) contact their service providers to find out more about their privacy policies; 3) be systematically informed about how third parties will use their identity information; and 4) have the ability opt out at any time.

Thomas Husson is a Principal Analyst at Forrester Research serving Consumer Product Strategy professionals. Follow him on Twitter at @thomas_husson

This article originally appeared in Forrester.

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