deCarta LBS Panel: What a Year!
A Panel on the Past Year in LBS brought several panelists including reps from NIM, Ford, INRIX, Nielson Wireless (corrected; originally Neilson Mobile [sic]) and others.
A Panel on the Past Year in LBS brought several panelists including reps from NIM, Ford (Sync is a Ford platform to integrate personal devices into the car. It’s currently powered by Microsoft. You can speak to your devices and have them respond), INRIX, Nielson Wireless .
Nielson Wireless (once Telephia) tracks use of the third screen. A rep offered up some new numbers: Mobile content revenue (US) is about $5.5 billion (corrected;originally million, source) market. Mobile download market is topped by audio and games (both dropping in growth) but the big growth is in apps. And, as noted 58% of revenue of apps came from LBS, GPS-enabled apps. That’s in part due to pricing model. LBS tends to demand a higher price than other services. The average price paid is about $8 per month. LBS tends to do well in keeping subscribers and adding new users. How do folks who have mobile phones and dedicated LBS device? They are just about equal – about 7.5 of 10 for both! LBS is defined as the most desired feature on mobile phones. Games, cameras, mp3 all fell lower than it’s 19%.
What were the big events of 2007 (Less TA and NAVTEQ pending acquisitions)?
- Across the board everything is up – mobile, in-car – it’s a mass market phenomenon
- Success model was realized, car ads have helped made nav mainstream and part of messaging
- “Perfect storm” – It’s been coming for seven years (chips cheap, prices down, GPS is cool)
- E-911 brought operators together toward interoperability (like SMS did)
What’s going to happen?
- Alliances will change (Traffic.com to NAVTEQ to Nokia will drive different relationships)
- Carriers are done with navigation/local search; they are looking for the next thing – how does that integrate with other offerings like social networking?
- Ford: we will “open the cockpit” – we are in the car business. It’s not up to us to stop cannibalization of our nav system, but integrate existing/future products. We’ll manage the interaction with those devices.
The subscriber model?
- Traffic as a standard feature – why? Because it makes another service (routing) which you don’t use everyday valuable everyday. Using it everyday (while it “costs” the provider more) enhances the likelihood the subscriber will stay a subscriber.
- Social networking is heading in that direction – more content to be used everyday and potentially a basis for ad revenue.
- NIM will likely be the nav company in three years, but it also enables local search, etc. Half now are local search, not nav.
What technology will win? PNDs/Handsets/The Car? Will connectivity change the situation?
- They are separate markets and they’ll stay separate. Low priced ones will have more users, but so in-car high priced ones will have some too. All will get connected – some better than others. The phone certainly has an edge now.
- It’s all about who wins the relationship with the consumer (since phone/PND are equally approved).
- What’s the definition of win? It’s about the different experiences – Starbucks vs. Donut Shop – they will all have audiences. They will all have the same functionality; they will all be connected.
- Traffic plays on both side – real time traffic in connected mode; historical data for offboard systems.
Business Models – What about ads?
- Options today for mobile are quite limited today (JumpTap for example, a company here at the event) but the benefit is great. Click through rates are very high and you know quite a lot about the individual.
- We should be skeptical; only Google and Yahoo are making loads on the Internet. So, likely a few will make money, many other will make little.
- Google is a destination site, so it can make money and we find it acceptable. That level of acceptance will need to be matched on the 3rd screen.
[Disclosure: deCarta covered my travel and lodging for this event.]
