2011 Showed Better LBS Market Gains, But Was It All About Google?

December 14, 2011By: Kevin Dennehy

LBS Insider, December 2011

2011 was a decent year for the location-based services industry. It was an even better year if your company was lucky enough to get bought out by an ebay, Google or Intel. While acquisitions stood out as the key LBS news in 2011, privacy stood out as an ugly issue that threatened consumer acceptance. In addition, automobile manufacturers are viewing social media as a new profitable technology for vehicles and were trying to convince consumers that the connected vehicle is the way of the future.

This year featured a slew of location-based company acquisitions and consolidation — far more than in 2010. The acquisitions of such established location companies as Where and Telmap by eBay and Intel, respectively, at least show that bigger companies want that capability in their online offerings.

Google made many moves into the location business in the last two years — and really went crazy in 2011 with acquisitions. Google is trying to grab a large share of the European traffic market by offering real-time services in 13 European companies. Google shook up the navigation market with free navigation service for Android phones in 2009.

To top off a big year for Google, the company is taking its mapping technology indoors with the launch of Google Maps 6.0. Indoor mapping and positioning received big headway in 2011, and it was reasonable to assume that the 800-pound LBS gorilla, Google, would be a big player to entice big retail companies to come on board for location technology to allow customers to find products.

According to published reports, some of the big-box retail stores such as IKEA, Macy’s, Home Depot and Bloomingdales have been mapped. However, a lot of the bigger malls, and Target and Wal-Mart, have not been mapped.

The cool thing about the product is that it also tells customers what floor they are on in a building. The uncool thing about the product is that Google Maps 6.0 is only available for Android.

Google’s indoor mapping partners include 18 U.S. airports, which will open up more partners and LBS relationships in the future.

A look at all of Google’s location market moves, and analysis, in 2011:

• Google’s major partners, who have more than 25,000 Google Maps application uses per day, will be charged starting next year. Some say it won’t hurt small companies much—and may even help companies who compete with Google. Either way, some say the decision was inevitable for companies making a profit–and using Google’s resources for free.
• The recent $12.5-billion Google acquisition of Motorola Mobility has some industry experts saying that the location market piece of pie is getting smaller every time the search giant makes a deal. Many industry experts have said that the main makers of Google Android smart phones should feel challenged as well as the company has seemingly gone into business against them. Google is once more trying to corner more of the social shopping market by buying The Dealmap, a 15-month-old company that offers its own location-based daily deal service.
• Google purchased Menlo Park, Calif.-based The Dealmap, a company that collects data from hundreds of sources and arranges deals by location, on its website and a smartphone application. The start-up, founded last year, has 15 employees and 2 million users, according to published reports. Google tried to buy Groupon for as much as $6 billion last year, and decided to launch its own service, Google Offers, in Portland. Google’s service has since expanded to New York and the San Francisco Bay Area.

More transition is happening in the LBS market this year — even at our deadline. As GPS Worldreported, LBS company Gowalla looks like it is shutting down by the end of January 2012, according to the company’s blog. Company president Josh Williams said he and his staff are now going to work for Facebook.

While some LBS analysts said this year that GPS technology, and its offshoot niche navigation capability, are just embedded widgets in the overall location market, others say they still are the driver to consumer awareness and acceptance.

“In my opinion, one of the biggest trends in 2011 included market acceptance — and demand — of GPS technologies. We are now seeing end-users demand GPS technologies in the workplace,” said Jonathan Hubbard, SpeedGuage CEO and co-founder. “In fact, truck drivers now say if you don’t have GPS-enabled automated logging of my work hours, or what we in the transportation sector call hours of service monitoring, then I won’t work for you. That’s a significant change in how GPS-enabled technologies were formerly viewed — more or less — for solely tracking purposes, and we see this trend only continuing and gaining momentum in the coming year.”

Other Markets and Issues Made Big Splash In 2011                                                                 

In vehicle technology also made headlines in 2011 when automakers said they would be increasing social media and other capabilities for new car models. Because of larger screens going into many vehicles, LBS seems like a natural advertising fit, but Thilo Koslowski, Gartner vice president, said that car companies will developing market strategies along traditional display-type marketing models.

Koslowsi said the biggest competition the auto industry has is the smartphone or other consumer mobile device. “We will see growth in vehicle application on the Android platform, while Apple will be leveling off. [Research in Motion] will have a lower share,” he said.

The other big “issue” confronting the LBS industry is privacy, which became big news in May when it was revealed that location data was secretly stored in all iOS 4 devices. It was learned that Apple was storing a file with location data in every iPhone or iPad with iOS 4.    These discoveries prompted Sen. Al Franken (D-Minn.), who was concerned that as many as 15 percent of users are children, to ask now-deceased Apple boss Steve Jobs about the operating system. In a letter to Jobs, Franken, who presided over hearings on location technology and privacy, asked why Apple consumers were not informed of the collection and retention of their location data, how frequently is a user’s location recorded, why is this information not encrypted, with whom has the information been shared, and what is the purpose of collecting the location data.

Apple contended that iOS devices are not logging the location of the user, but caching a database of Wi-Fi hotspots and cell tower locations around a user’s position. Some of these cell towers may be many miles away from the user.

In other LBS Insider news:

• Veteran telematics vendor Cross Country Automotive Services and its subsidiary, ATX Group, which is a provider to BMW, Hyundai, Infiniti, Lexus, Rolls-Royce Motor Cars and Toyota, announced their new corporate brand name, Agero. Cross Country, which purchased ATX in 2008, says Agero will create products for auto manufacturers, insurance carriers and aftermarket providers.
• GPS World Magazine is GPS-Wireless 2012’s official media partner. GPS-Wireless 2012 will be March 21-22 at the Hyatt Regency—San Francisco Airport.
• LBS Insider will be covering the Consumer Electronics Show in Las Vegas next month. Please send me your news tips and releases.