Thanks a lot for sharing your thoughts with the rest of the world. I find your entries extremely useful since I’m working on a bachelor thesis that is about the same subject.

I think selling collected data might be a good business model, if you can aggregate a big user base like Google did with Google-Maps. But the model doesn’t work for companies that have a smaller user base.

To create a LBS-Business Model for “everybody” I think we have to consider to things:

First, the user is willing to pay for a service on his mobile phone, because he’s used to do so (at least for some time from now on).

Second, the user would not accept ads on his mobile phone. At least everybody I talked to didn’t.

So the only business model that I see right now and that would work for every LBS App would be the Freemium. Of course only if the application provides a value to the user.

But I’m at the beginning of may thesis journey. Maybe I will be smarter at the end

cheers
Hamza

- third parties will provide:
a) CONTENT (very likely). This would include commercial data (eg: Yell, Google, Microsoft, etc.)
b) the application itself (development, …) (possibly)
c) the GIS platform, data and algorithms (reverse look-up, routes, etc.) (possibly; maybe subcontracted to GIS-specific companies)

A very likely scenario would be a deal between carrier and content/service provider, although the operator could appear as service provider to the end user.
Of course, some actors (Google, Nokia/Navteq, Microsoft?..) will try to aggregate everything and go for vertical business models taking control of the whole value chain… Current technology (limited base of GPS-phones, etc.) may impede (or simply delay) LBS being deployed without agreement with carriers

So LBS comes knocking on my door, I like aspects of it. I like a smarter phone. I like the idea that I could find stuff near me, WHEN i’m interested. I like that I have control. LBS is key on control, if LBS violates control the deal is off and your service will be kicked to the curb. And there will be soooo may competitors hot on your heels hoping you’ll do just that.

The next wave will be the allure of the opt in experience, the devils gateway so to speak, you’ll opt in for banner ads at every turn to do X on your amazing device. Yes and no, but likely a yes for some folks.

I think the biggest thing that gets me about LBS right now is that its all new frontier and its not really even asking consumers what they want to do. The LBS opportunity is alot like early web 2.0 thinking, you can do it now, you can mashup this tech idea with that tech idea and create x new service or new ability, its like awesome, you can build this and the phone could do that, all the while you still haven’t asked what the heck the customer many really want. And the kicker is, they may not be able to tell you just yet, cause its new. That for me if I was an investor is a bit of a crapshoot. Sure you could make flying dolphins, and they could be a huge hit, and yes there’s alot of “could bes” in this statement, but it could work out in your favor, you could be on to something, it could be pretty could, but what it will be for sure for the first few years of it, will be a crap shoot.

Before ya know we’ll bombard the crap out of the consumer with conflicting data serving apps, all cant wait to make your phone go off like a flare when you near a mall. SALE SALE SALE, and folks will be headed closer to platforms where they have that control.

I’ve worked with a couple of companies that have aspired to the model of location based advertising but I found their vision far too limited as you allude to by noting that it is not necessary to show the ads on the facility that determines the location (cell phone for example)

The major problem seems to be the potential for either sharing of data or being able to “push” ads to locations that you don’t directly control.

I have met with a company here in Vancouver that is putting advertising screens in all manner of locations – running them much as you might run ads on a web portal. The locations are all either WiFi or packet cell connected – run by stripped-down laptops bonded to large (letterbox but hung vertical) LCD panels.

Their distribution model could be molded in the fashion you describe but we still have to have the technology to identify people; not personal info but tracking-individual type info (I don’t know who you are but I’ve seen you in these locations over the past month/year) which today means watching for bluetooth or cell ids – and in the future may mean watching for the RFID tags on passports/drivers licenses/underwear, etc. (yes, I’m paranoid about that but until it is outlawed it is still a possibility.)

The cost for fairly complex embedded, networked systems is down to the point where the business model makes sense – it is the controlling infrastructure and a bit of R&D to bond the available technologies together that is all that is necessary. I have on my desk a “Internet set-top box” that runs Linux, shows Hi-def TV and costs less than $100.