What the iPhone might mean for LBS ?

According to almost everybody on the internet, at 10am PST on the 9th January next year, at the Moscone Center Steve Jobs will introduce the iPhone, perhaps one of the most anticipated products ever from Apple.

There is much speculation as to what the phone will look like and its functionality, and this tends to focus of the “ipodness” of the phone – to me what is interesting are two things is particular, the potential that the iPhone will be should SIM free and that it might contain as well as a camera a GPS.

Actually I think the fact that the iPhone is likely to be sold SIM free and not tied to a network contract is the most important part of the whole iPhone story, – If this does turn out to be the case it will a direct attack on the already crumbling “Walled Garden” model of the operators – a major deterrent in the development of LBS so far.
iphone
In the walled garden, you buy a phone at a subsided price from the network operator in return for a service contract, and less obviously a set of applications and services selected and controlled by the operator. So if you want to make use of a music download service, you must use the operators one, likewise want to use LBS then you the one the operator provides.

Of course it is possible to buy phones today SIM free, but the marketing behind Apple and the buzz the iphone will create will I believe shift the market more towards an “open” model, where greater innovation in LBS applications can take place. There is clear precedent for this, just think what the online market might look like if we where all still accessing the net through CompuServe or AOL’s or even Apples eWorld (Anybody else remember that ?) environments.

A couple of months ago there was much excitement when hackers noted the latest version of iPhoto suggested support for co-ordinate metadata to be attached to photos – now what if the source for the photo was the camera in a “smart” iPhone and the metadata came from an onboard GPS chip-set – again this could lead to a future potential market of tens of millions of LBS capable devices.

Well it has me excited !!

Written and submitted from the BA lounge at Heathrow airport, using the BT Openzone wifi broadband internet connection.

2 comments

  1. Simon Bartlett

    Your description of the ‘Walled garden’ that opperates around mobile phone services is excellent, yet I am not certain I share your view that an ‘open’ model will encourage innovation and improved LBS. At the moment we are seeing massive price cutting in the mobile sector, as the suppliers try to extend their customer base. Some commercial/corporate contracts are quite frankly too good to be true. The reason for this is both the competition in the sector, and also ‘land and expand’ approach to marketing. Suppliers want to get you signed up, then sell on their premium services. Nothing about the systems to support telecoms or LBS is cheap, so suppliers are obviously trying to safeguard their investment. In an ‘open’ model, what is the insentive to develop improved LBS systems given the expenditure required. If your customer base is transient, is it worth the effort? Cost / profit margins will always govern what is available, and the model under which those services are supplied.

  2. Ed

    Hi Simon,

    I agree that the operators need to see a return on their investment in LBS infrastructure, but this will only come if they open up to allow innovation to take place in the wider community – as I said we would not have seen google, ebay or my-space if how access to the interest was still restricted in the way is used to be in the days of AOL and CompuServe.

    The operators need to separate their businesses at least conceptually between the “network” bit which sells bandwidth and therefore gets a cut of everything and the bit which sells stuff both content and applications in an open market – this is the bit where innovation could take place, and even if the operators LBS application was not successful they would still make money from the network.

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