GPS--money earner, or novelty?

Nokia has forecast that around 50 per cent of its handsets will be GPS-enabled by 2010 or 2012, not an enormous surprise given that the technology costs associated with GPS are falling rapidly and the #1 handset vendor will see this move as a product differentiation factor.

But adding the technology doesn't mean it'll be used--as with many (the majority?) of existing features already bundled into mid to high-end handsets.

Operators will be less willing to subsidise GPS-enabled handsets unless they can see a route whereby they can monetise the technology. Suggestions have included using the GPS feature to enhance the value of other existing services, such as messaging, or serve as the platform for entirely new ones, such as social networking or treasure hunts.

However, GPS has a limitation--the ability of the receiving device to see at least a number of the GPS satellites. This is largely OK with in-car navigation systems, but users expecting GPS to provide reliable location data in cities--when surrounded by high-rise buildings--will be disappointed.

According to Paul Lee, telecoms director at Deloitte, this is relatively easy in a car with GPS systems usually being mounted on dashboards, or integrated into cars and linked to an external antenna. "In contrast, mobile phones used by pedestrians are often kept in pockets or hip holsters. In either case, line of sight is far harder. Furthermore, with pavements often in the shadow of tall buildings, pedestrians may struggle to get a signal even with the device uncovered.

"Thus while a growing number of GPS-enabled mobile phones may be shipped and sold, aside from the initial novelty, they may not be used very often. This may mean additional costs for the manufacturers and operators, but little added value."

How often has the mobile industry pushed technology into the market without a business case--rather too many times, I would suggest. -Paul