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Location, location, location? Wrong, wrong, wrong

In real estate, you will have heard, there are only three rules: location, location and location.

In the emerging industry of mobile commerce, we hear the same argument. Much is made of the potential of location-based services (or LBS, in its inevitable acronymisation). The most profitable models for the delivery of mobile commerce services, say the experts, will be based on where users find themselves. Ergo, the most successful services should be the likes of:
IBM’s vision of LBSTraveller services – business travellers wanting information on the destination where they’ve just arrived;

Entertainment information – users going out to movies or a meal wanting information on what is in the area where they find themselves;

Route information – directions on getting where you want to go from where you are;

Emergency services – alerting rescue, medical or police services on the location of someone in distress (for more examples, See IBM’s vision of LBS).

Aside from the last – which is more usually the province of public authorities rather than of commercial services – the problem with this vision is that much of it doesn’t make sense. Oh yes, it makes perfect sense from a technological perspective. This is what the technology can do, so why shouldn’t it be part of the promise?

Even academics are arguing that mobile commerce is dependent on Location on the one hand, and on Time on the other. In short, where users are, and when they are there.

But it is wrong, wrong, wrong.

If the mobile phone or data device is about anything, it is about mobility. It is about being unwired. It is about being untethered. In other words, it is about NOT being tied to location.

The other half of the equation, Time, is far more relevant, yet far less often acknowledged. Take sports results, one of the more popular forms of information accessed from mobile devices. It is irrelevant where the user is at the time of seeking the result. Of critical importance, however, is when the user wants those results. If they aren’t available from one provider immediately after the end of an event, the user will try the next provider. If the user is relying on a subscription service, and it does not deliver on-time results, the user will abandon the service in favour of one that is more time-conscious.

Same applies to share prices and exchange rates, ring tones and mobile graphics, short message services and e-mail access. These are among the most common applications of mobile commerce, and none of them relate specifically to the immediate location of the user.

The one common application that is location-oriented, navigation, is entirely dependent on a GPS receiver being built in or connected to the phone. Standalone navigation devices are far more effective and reliable right now, and are not classified as location-based services.The difference is subtle, but navigational services are not the same as location-based services, and are a function of satellite triangulation rather than network signal location. Once GPS becomes a standard feature in cellphones, that distinction will become irrelevant, and LBS may well become respectable.

At present, location is mainly important in this context from the point of view of access itself. Whether and where the user can access the network. Again, this assumes that emergency services are part of public rather than commercial service.

Why the obsession with LBS then? It is a result of focusing on the capabilities of the device rather than the needs of the user of the device. This was one of the basic reasons for the collapse, which was in many cases a consequence of enthusiasm for the technological potential of the Internet, rather than its real, practical and everyday benefits.

In the unwired world, the focus is often on technological potential, rather than practical reality. The consequence of this is that the agenda for mobile communications is set by the technicians who are focused on technical detail, and who superimpose a technical view on the usage of the technology. Déjà vu, anybody?

Here is the news, for the overly technically focused:

  • Location-based services were not invented by the mobile industry. Even local newspapers represent a form of location-based service. LBS tries to reinvent what already works well.
  • Users don’t stumble about with their eyes glued to their mobile phone screens, trying to figure out where they are, wondering what movie is showing across the road, or choosing from all the special 25 percent discount offers sent unsolicited to their phone from the stores they are passing.
  • In most cases, users don’t need their mobile devices to tell them what they are seeing before their eyes.
  • Users tend to use their mobile devices to make contact with people who are not at the same location.
  • Users access information that is usually not directly related to where they are, but rather to what they want to know – irrespective of where they are.

Of course, there is a form of LBS that is hugely profitable, but it’s not what the technicians had in mind for their acronym. It’s called voice, and it is often used by people wanting to inform others of where they are, or to find out where others are. This does not, of course, need the mediation of service providers other than the standard, built-in role of the networks themselves. And that is bad news for anyone who bases a business model on selling LBS on top of existing network services.

They are doing nothing less than selling something no one needs to buy right now.


The Big Change is a business strategy blog and newsletter published by Arthur Goldstuck, managing director of World Wide Worx, a leading technology research organisation based in Johannesburg, South Africa.

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