There was a time when you could answer your mobile telephone on the beach and tell your boss at the other end that you were at a client's office. The gentle hissing of the ocean in the background could be explained away as noise from the air-conditioning and the giggles of nearby volleyball players could be passed off as office banter. Sadly, this could all be set to change. Location-based services (LBS) - supposed to be the next big killer application for e-commerce - could put you on the map, making it perfectly clear where your handset is.
The idea is that location information could lead to a new class of applications that might stimulate the flagging wireless e-commerce sector. Customer response to WAP phones has been so poor that the much-expected wireless Internet revolution has ended up being little more than a localised mêlée. Surfing the Internet is something most people prefer to do at work or in the comfort of their home on a big colour screen, rather than on a small monochrome one. There are plenty of things that you can do on the Internet that will make you go blind, but squinting at small screens shouldn't be one of them.
Capitalising on the mobility of cellphones in an e-commerce model, however, should attract more attention from customers and boost confidence in wireless e-commerce. That is what vendors and mobile telephony carriers are hoping for, anyway.
Various applications are being proposed for this technology. One big area, claims John Barber, CIO of Cambridge Positioning Services (CPS), a company which provides software to gather and distribute location information from mobile networks, is personal safety. Handset location would be very useful in an emergency call situation, for example, or if your car breaks down by the roadside. Indeed, the Federal Communications Commission (FCC) in the US has stipulated an October deadline for Stateside mobile carriers to provide location information to the emergency services.
One area that David Pearce, director of corporate development at location-based services software vendor Signalsoft, draws back from is the inclusion of a panic button that you could press to bring the police running to your location. "You can panic unduly," he points out. "And what if a carrier gets blamed for not putting a panic call through? You can't guarantee things such as latency and liability." Consequently, panic buttons would be too big a risk for cellular network operators.
Ken Hart, vice president of marketing with Airflash, a company which offers applications development platforms for LBS providers, breaks down the mass-market applications space into three complementary areas. Moreover, he says unless you offer them all, you'll lose out to the competition. "You need to develop killer portfolios of services," he warns, giving an example of how not to do it: "There's an operator that created its own pub finder. You can find a pub, but you can't figure out how to get there or invite your friends."
The first of Hart's application groups is the 'find it' category, which helps you find the nearest retail outlet selling a certain type of product, for example, or the nearest Italian restaurant. He calls the second category 'share it', where you find a friend to enjoy it with - if you're waiting at the restaurant and your friend is late, it would be nice to know when they will arrive so you can order them a Peroni.
In reality, the need for such services is limited. After all, people are generally in areas they know when they use mobile phones. The real benefit will come when they're travelling in areas they don't know and are able to find sites they need. On the other hand, people have so far survived by asking directions from strangers.
The third category, 'buy it', is perhaps the most promising. It enables you to conduct transactions based on location information. Rob Price, senior development channel manager at LPG, a company that offers mobile portal software with LBS capabilities, thinks the 'buy it' category will be the clincher. "I could be passing a petrol station and receive a message offering me 10p off a litre of petrol if I come in and fill up right then," he says. Better still, ordering a cab simply by pressing a button and waiting for one to turn up could be a killer application for busy city travellers who can't get a ride.
Perhaps the most interesting applications, however, are corporate ones. There are many companies which would be happy to use location-based services to support their internal processes. One good application would be fleet management, where drivers could be given LBS-capable handsets when on the road. That way, the central co-ordinator could keep track of them at all times. It would be perfect for everything from taxicabs to truckers. It would also be much cheaper than installing a custom piece of location-tracking equipment into a truck. Similarly, shipping applications would also benefit.
Kevin McCracken, senior manager of wireless networks at Nortel Networks, posits another corporate application - network optimisation for employees. If employees travel on a daily basis and log into the network from different locations, your network could show them local information. "Something could direct your closest access point to the local network and route that appropriately. When I land in Paris and bring up my PDA or laptop and activate the network, it homes in and determines that I'm in France, so instead of bringing up the London home page, it brings up the Paris home page." Perhaps more importantly, such a system could increase performance when accessing data across the network by moving it to a local server, based on information from the handset.
Tracing your moves
The truth is that cellular networks have been able to see where their customers are all along. It's necessary to know where a mobile handset is so that a call can be set up and maintained. The cell-based infrastructure on which the network runs does this. Until location-based services began to appear, however, it wasn't necessary for the infrastructure to provide this information in any detailed form because it was only used for call routing. It must now be available to enable your location to be used by e-commerce applications.
The problem with locating a handset based on what cell it's in is that the information isn't very precise. A cell has a wide radius - 500m upwards, depending on where you are - which means the network can only get a vague fix on your position. Other technologies, however, have been designed to pinpoint your phone with more accuracy.
One of these is Assisted GPS (A-GPS), based on the geographical positioning system signals emitted by US military satellites. The phone handset effectively knows where it is by looking at the sky. One of the problems with A-GPS is that the handset needs a line of sight to the sky, making it difficult for it to work inside buildings.
Barber at CPS prefers another option. The Enhanced Observed Time Difference (E-OTD) system works by using three cells to track a handset. Each cell monitors the handset signal and makes a calculation to determine how far away it is. They then triangulate their signals to work out where the phone is inside a specific cell. Barber claims he can pinpoint a phone within 50m using current networks and will provide even greater accuracy when 3G comes along.
The doughnut effect
Carriers in the UK are still in the early stages of their LBS strategies. Vodafone, for example, is offering location services in conjunction with third parties such as the AA, but only on a Cell ID basis. No one in the UK is making use of advanced technologies such as E-OTD yet. Some people, such as Airflash's Ken Hart, believe Cell ID is enough for now. His system takes Cell ID information and tries to refine it by finding streets in a certain area, for example. It wouldn't be too hard for a mobile user to select a street name from a list of local roads.
Moving from Cell ID to more advanced technologies requires a significant investment. "Carriers question the value of providing that accuracy and whether they can get the return from it," says Signalsoft's Pearce. "Cells in cities can be 500m in diameter and with some of the timing advance stuff you can get to 100m, which may not be suitable for turn-by-turn directions or emergency services, but it's fine for finding your mates or where the nearest site is." He describes the doughnut effect in LBS: users are in the centre of a giant virtual doughnut. The hole in the middle is the area in which they can see everything and therefore already know where it is. The world outside the doughnut is too far away to matter, leaving the tasty pastry in between, which represents the revenue opportunity for carriers and software providers.
Another problem in moving beyond Cell ID is making sure that handsets are capable of supporting the technologies. Cell ID is network-based, meaning that handsets don't have to be upgraded, says Pearce. Moving to E-OTD or A-GPS involves handset replacements, but the customer base will only do this over time. Consequently, the investment required in high-end technologies will only start yielding revenues on a trickle-through basis.
The trouble is these revenue models are far from clear. Sean Phelan is managing director of multimap.com, a company which provides maps to PC and PDA users across the Internet. He's excited about LBS, but is aware of the uncertainty surrounding it. "The days of raising millions of pounds for speculative business models are over," he says. "Smart carriers realise that those forecasts which predict LBS will be an x billion dollar business are made by the same market researchers which claimed WAP was going to be an x billion dollar business."
To increase revenues, carriers will have to make sure not to tread on customers' toes by being too intrusive, or providing their location data to other service providers. "It's possible to opt-in," argues LPG's Price, describing a model where users ask for location-specific commercials and special offers from certain companies before they appear on their handsets, rather than having to ask not to receive them (the opt-out model). "Opt-out would be a dangerous thing. Every few miles you travel you could end up being paged by someone. If it's used and controlled in the right manner, it will become a valuable marketing tool. It will give people expedient information."
Location-based services are clearly the wireless industry's chance to regain face after the WAP wireless Internet debacle.
But it's not going to be easy and the business model for it is far from certain. LBS is already up and running on some 2G networks. Hopefully, it will prove profitable enough to help recoup some of the huge investment that carriers made in their 3G infrastructure.