e-Commerce guide: Wherever I may roam

Location-based services could be just what wireless e-commerce needs

Location-based services could be just what wireless e-commerce needs

What are location-based services?
A location-based service enables mobile phone users to access services based on their geographical position. The idea is that the network garners information about where the user is, based on signals from the handset. Using this information, it can offer services to the user, often in conjunction with third parties. Imagine, say, being able to find out where your local mechanic is, if your car broke down.

How do they work?
Location-based services work in a number of ways, and each method has a different implication for the mobile carrier. One of the easiest to implement is Cell-ID, and is based on the fact that mobile networks use a series of radio base stations to create reception areas known as cells. The networks simply take a note of the cell that a particular phone is in, providing a broad idea of the location of a user.

This is the easiest method for mobile telephony carriers to implement because it requires very little modification to the cellular network. On the downside, it isn't as accurate as other options, such as enhanced observed time difference (EOTD) and time difference of arrival (TDOA). These technologies use more than one base station, triangulating the signal from them to find out more or less exactly where the phone is. Other technologies in this area include angle of arrival (AOA), and advanced forward link trilateration (AFLT).

The other option is to use a graphical positioning system (GPS) built into the handset, which can be used to ascertain a precise position. This technology, known as assisted GPS, has its advantages, but a big downside is the size of the GPS circuitry, along with the drain on battery power and the fact that such devices can't normally work inside a building - they need a clear line of sight to the sky.

What sorts of service can be offered around them?
Applications fall into two main areas: corporate services, and mass market ones. On the corporate side, things like vehicle tracking and logistics are a no-brainer, because it's much cheaper to issue each of your workers with a mobile handset than it is to build specific tracking equipment into vehicles.

On the mass market side, the commerce implications get more interesting. For example, says Lars Person, director of Cellpoint, a company that produces location-based software for mobile carriers, one of the biggest markets for location-based services will be teenagers (and we all know the value of the teenage market in terms of revenue). Being able to find your friends and then find out what movies are playing in the area, for example, will interest teenagers immensely. Being able to find other specific sites - a hotel with discounted rates, or an Italian restaurant - will interest adults.

One of the early drivers for location-based services, however, will be personal safety, according to John Barber, chief information officer of Cambridge Positioning Systems, a rival company to Cellpoint.

Are carriers offering them?
Yes. Orange is carrying out trials with certain businesses - already you can find things like cashpoints relative to your location, while Vodafone is offering services to its customers in conjunction with companies such as the AA, which provides local traffic information. High-street retailers Lush, HMV, Oddbins and Superdrug are using a location-based service from Brainstorm, based on Wap technology.

What are the profit models?
At least in Vodafone's case, the profit models are limited because third-party companies cannot offer their own location-based e-commerce services based on information fed through to them by the carrier.

Data protection issues make it very difficult to feed information about someone's location through to a third party without that person's specific consent. Consequently, at least in the first instance, it is likely that companies wanting to take advantage of the commerce services will need to sign up with a carrier to offer their services through the carrier's own portal. Vodafone's portal provides a conduit for companies like Woolworth's, Whitbread and Comet, for example.

Another option in the future is to provide a specific number for an individual to dial, on the contractual understanding that doing so will provide your company with information about their location. This would enable you to run your location-based e-commerce service in-house, but such relationships are a long way off, says Barber.

What are the main barriers to implementation?
Privacy is one of the biggest issues for end users, as non-technical people are often worried about the Big Brother aspects of new technologies. Consequently, companies will have to be careful about how they implement location-based services, being sure not to bombard their users with advertising.

Further information

Location forum: www.locationforum.org
W3: www.w3.org/Mobile/posdep/MotorolaW3C.html
Pulver: www.pulver.com/lbsreport/lastlbsreport

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