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May 28, 2008


Giff Gfroerer, i2SMS


Can you expand on your LBS comment a little? 3% is a low number. What can we expect in North America and Europe in the future in LBS? What services outside of navigation will work? We have long believed LBS will be a niche market, so what is it that is working in Asia?


Tomi T Ahonen

Hi Giff

The big opportunities in LBS, according to all I've found since my first book had a chapter on it - tend to be enterprise/corporate solutions. The LBS based parcel tracking, driver or vehicle tracking, etc. type of services. There is some marginal take-up of friends-finders, but not much. The LBS based personalized weather is a total waste of effort (how many minutes will this rain continue raining right over me - launched years ago in many markets and no mass success), as are various "I'm lost as a tourist and I need to find a cash machine" type of services.

Even in Tokyo, one of the world's most miserable cities to navigate - even taxi drivers are perennially lost, because the street numbering is NOT in numerical order. The house in front of you might be number 7, the next house down the same street, be number 44, the next house after that number 15, the next house still on the same street and same block, be number 61. The house numbers on streets in Tokyo are never in numerical order!

That would be the ultimate opportunity for any location-based guidance service, where is the nearest Pizza Hut, where is the nearest locksmith, where is the nearest post office etc. The service was launched in Japan by KDDI in either 2000 or 2001, and still today has miniscule subscribers and no significant killer apps. In Japan where more internet users access on mobile than PC and where all phones sold today are 3G phones - and LBS was launched at the start of this decade, still today, not a mass market. When I heard this from KDDI a few years ago, I totally gave up on the LBS dream, ha-ha..

So yes, what might work? Some LBS games may succeed, like BotFighter from Sweden or Mogi in Japan. These tend to be short-lived. There can be some campaigns or short duration services with some gimmick around it.

The "grand idea" that Disney MVNO had in the USA, to use the children's phones as trackers so the parents could snoop on their kids, was pretty much what killed Disney's venture. Kids hated it, but not just the "toxic" Disney phones, they hated all kids who carried them - because Billy's mom might tell MY mom where I was... So kids with Disney phones soon were excluded from all activities, so they started to lose or forget or break their phones.

So yes, the child-tracker, what sounds such a safe and good idea for parents, is of course what kids hate, so it won't fly. Not with teenagers at least (maybe with under 10 year olds..)

I have catalogued well over 100 LBS services over the years, nothing truly amazing among them, perhaps my fave is the "pay-as-you-drive" insurance service in Britain, which is LBS for your car, the way you move your car will determine how much your insurance is. The guy who is the driver for the kids going club-hopping on weekends downtown, will pay far higher insurance than the driver of the same age, who only drives the car on weekends on country roads with no congestion.. Makes sense. But again, not a mass (telecoms) market opportunity, more a niche opportunity.

Thanks for writing

Tomi :-)


Thank god we've managed to block all LBS initiatives in my company. Too many mobile operators are wasting important resources on LBS.

Tomi is right, this is for enterprises and GPS and GPRS/EDGE takes care of these needs much better.

With GPS becoming standard on many mobile phones we might see a development in the mass market in the future on GPS and 3G(who knows what will happen). Let it happen that way. As always, the users will show the way.


Tomi, fully agree with your view of LBS. There's no true mass market. But still - I'm one of those people who pray at the LBS altar ;-)

Yes, they're a niche market. But right now, there's a technological move away from closed operator-centric LBS infrastructure, towards open Web-based systems and client side positioning (GPS and 'hand-mapped' cell IDs like in the mobile Google Maps client). What we're seeing now, is a new situation. That didn't exist in the times before camera phones and MMS.

LBS are now entering the game of long tail economics. I think there is a future for LBS. Though not necessarily the way the operators have expected.


I see one fundamental end-user need: to communicate my location to someone else. It's not solved well today. You often have to give lengthy explanations where you are and how to get there. You might know where you are but not well how to tell somebody else how to get to you.
Even more difficult in places like Tokyo without addresses in Western sense.

That's why I haven't given up hope that one day some LBS will win by solving this end-user need. It is not easy, for sure.

Does anybody know examples for LBS that tried to primarily solve this problem (and not as one of a bazillion other problems)?


Tomi T Ahonen

Hi Lars, Rainer and Alex

Thanks for the comments

Lars - good point. I do think this is over-investment by several orders of magnitude, and most dabbling in the LBS space will get burned, but the market will sort things out.

There was a time they said the next generation of mobile telecoms was satellite phones - and two rival satellite communciation systems wasted billions shooting rockets to space for satellites to give us even more mobile communications than terrestrial cellular telecoms. Not every good technical idea has commercial merit, ha-ha..

Rainer - good point about the long tail in LBS. That is most certainly valid. I am 100% certain LBS will not "ever" become a mass market commercial service, and by ever, I mean during the next decade ie as far as we can possibly see in this technological climate. But the more creativity we can find into this space, the more long tail type of niche opportunities will emerge. Then when we have our GPS receiver in our handsets, our maps pre-loaded on our phones, then yes, we will occasionally find a good LBS need.

Hunting dogs. A Finnish company launched the hunting dog tracker for mobile phones - including the GSM dog collar, that included a microphone, so the phone owner could also listen to the dog, is it barking, etc. And track the hunting dog as a moving dot in real time on the map on the phone. Yes, this kind of niche app, why not. But we had a hunting dog when I was a kid. My parents both were big hunters. Yet my mother insisted the dog not be trained for hunting. So even as we were very close to the target audience, we would not have used the service ha-ha... Long tail yes, mass market no.

Alex - good point. And those services exist, in many markets already. You can register yourself and your friends have to register, then you can track each other. We have had that in Finland for many years, they have it in many countries. The early services were based on EOTD (Enhanced Observed Time Difference) so its a triangulation technique for cellular telecoms, gives about a 100 meter (300 feet) accuracy. Today with GPS we get the accuracy to almost perfect.

Incidentially, everybody, I've been asked to post a main blog entry about my doubts about LBS which I will do as part of the current iPhone 3G hysteria, in particular as it does have the GPS receiver..

I'll do that shortly

Thanks for writing

Tomi :-)

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