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Location Platforms Present Challenges—and Opportunities—to Various Stakeholders

20 April 2012

A number of interesting developments are taking place at companies that are involved in enabling location-based services (LBS) on handsets or motor vehicles, according to IHS iSuppli Automotive Infotainment and Telematics service from information and analysis provider IHS.

Five years ago, location technology was a standalone premium service, offering limited interaction with other applications. Today, location has transformed into a way for users to share their whereabouts with others in real time.

This change has broadly impacted the location business, from ecosystem providers to application developers to end-user attitudes. As a result, a number of companies are rethinking their strategies on how location services should be developed and deployed. For example, Nokia is breaking with tradition while Intel is taking a completely new approach to LBS.

Location Services—Coming to a Chip Near You
In September of 2011, Intel raised eyebrows when the company announced it had agreed to acquire the Israeli location services and navigation provider Telmap. Telmap will be a wholly owned subsidiary of Intel and will allow Intel to add LBS such as navigation and local search to the AppUp ecosystem. Telmap will integrate its standardized location applications programming interfaces (APIs) in the Intel platform, allowing developers to utilize location-based features in their applications.

Intel wants to make location and LBS capabilities an integral part of its chips, which can be used for smartphones or automotive solutions. Instead of providing access to location information as part of the mobile platform, Intel wants to provide device makers as well as potential automotive clients with an option that already includes the necessary location APIs as part of its chip designs.

The implications of such a system for handset makers could be tremendous. By using Intel chips in their handsets, device makers would be in a position to provide end users a set of brand-specific location services, regardless of which operating system happens to be deployed on a given handset. Instead of having to use Google, Microsoft, RIM or Nokia location APIs, device makers could use the Intel location platform found on the chip, putting them in a position to compete with the operating system ecosystems on this level.

While handset makers could use the Intel platform to introduce their own, branded cross-platform services, Intel is able to differentiate its chips from those of the competition by providing handset partners with a chipset bearing increased functionality. Integrating Telmap content and capabilities highlights Intel’s desire to make its chips an even more essential part to devices in general. While Telmap’s location content could be deployed on mobile handsets and vehicles, Intel’s interest is not necessarily to be a content provider in the traditional sense. The company sees this type of integration as a necessary step to stay competitive and sell as many chips as possible.

This strategy will complement Intel’s investment in automotive technology development with its Intel Capital Connected Car fund. The $100 million fund was introduced in February 2012 and will be invested globally over the next four to five years in hardware, software and service companies focused on developing technologies to promote new in-vehicle applications, and to enable links between cars and all connected devices. These will include new in-vehicle applications and development tools, next-generation automotive advanced driver assist systems (ADAS) technologies and multimodal capabilities such as speech recognition, gesture recognition and eye tracking optimized for the connected car.

Assets Need to be Utilized
While other players in the location business do not have the same opportunity to integrate their location assets on chips or other components, they are awakening to the fact that they need to better utilize their existing location assets.

TomTom is a prime example of this change in attitude. While Tele Atlas products have naturally been sold independent of TomTom’s core products since the acquisition, the navigation provider is now looking to use the licensing of its map data as well as other assets to generate new revenue and to compensate for declines in revenue from the portable navigation device (PND) business. Where TomTom’s HD Traffic was a differentiator for its PNDs, it should now be used as part of TomTom’s location content products and licensed out to willing takers.

Nokia is also an interesting case. The company has a long history of packaging location services as a premium differentiator with some of its handsets. The most notable of these services has been, and continues to be, on Windows Phone devices, Nokia’s Maps navigation application. Unlike other solutions on the market, Nokia customers with compatible handsets have been able to download extensive map data to their cellphones and use the solution offline, without data network connectivity. However, the continued slide of Nokia’s market share illustrates that this service offer is not enough to attract users to the platform.

Changing Attitude
The attitude toward location service assets is changing. On one hand, Intel is actively working on integrating a location platform on its chips to make those chips more valuable for handset makers while at the same time allowing handset makers to develop their own location services independent of the operating system utilized in the handset.

On the other side are traditional navigation players like TomTom and Nokia, which have spent a lot of money to acquire advanced location technologies and content. Because of the commoditization of these assets, both companies now have to look beyond their own products to best utilize their capabilities.

The result of this transformation in the market will lead for an increasing number of companies having a larger location-based services supplier pool to choose from for their respective needs. Additionally, this development puts pressure on Google to continue innovating on its Google Maps platform, or to let it face the potential of being discarded by an increasing number of applications.

Learn More > IHS iSuppli Automotive Infotainment & Telematics

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