Nokia Hopes LBS Will Help Stop Handset Prices Falling

This is admittedly from last week, but the headline from Moconews about a Wall Street Journal article really caught my eye, especially as I had a bit of a rant to some people at the recent Fixed-Mobile convergence summit I attended about location based services.

Moconews reports

According to the article, "analysts expect many consumers will be prepared to pay more for a phone with navigation", which would make it different from other new mobile services such as TV. There is a boom in the number of portable navigation devices being bought, with 9.9 million sold globally in the first nine months of 2006, more than twice the number in the first nine months of 2005, and they pay between 300-500 euros. It speaks to demand, but how well the handset manufacturers can turn that into demand for a Converged device is another question. Mobile phones do have other advantages over stand-alone devices, which should help.

Nokia's plans are to give away maps and local searches and charge users extra for city guides and navigational services, all worthy services that I'd probably use on any enabled handset, if it was available.

According to the WSJ article, Nokia plans to provide such services for €89 a year, or €9.99 a month for spoken word turn-by-turn navigation, and guides from partners will cost around €10 for a one-off purchase.

The only real problem at the moment with services like these is that they all require access to some form of Location Based service, and if you're in the UK, this is delivered through whichever carrier you are connected to.

The primary reason in the UK for so few existing LBS applications like the ones Nokia are talking about is not because they're difficult to implement (they're not), nor that there's no interest in them (there is), it comes purely down to price, with the average wholesale price of a *single* location query costing in the region of 25 pence.

Which means an LBS provider has to make that back from the customer, typically forcing the cost of a single location query up to a retail price of �£1. For LBS applications like those Nokia are talking about, there either has to be a fundamental change in the pricing structure (turn-by-turn navigation services work on the assumption the navigation service actually knows where you physically are at multiple points throughout your journey, which means multiple �£1 charges to figure out where you are during the navigation process), or the handsets have to work based on an embedded GPS device – which is what Nokia plan to do.

If this come come to pass, and the GPS granularity is high enough, we can only hope that Nokia will provide third-party access to the GPS data in some way, which will allow companies to develop other, perhaps more compelling LBS applications without having to rely on the stupidly expensive LBS queries currently provided by carriers.

| March 2nd, 2007 | Posted in Location Based Services |

3 Responses to “Nokia Hopes LBS Will Help Stop Handset Prices Falling”

  1. Ben Says:

    The survey results are interesting and could support arguments for LBS. However I do wonder if consumers were more interested in just replacing their nav system with 1 device in the car. It would be interesting to know if they were actually going to use it to look up other LBS type queries like find something near me. Some figures I’ve heard in other surveys is 98% of the time you know where you are, and 75% of queries are not related to the area you are in.


  2. business loan Says:

    Nokia apparently plans to give away maps and local searches for businesses like restaurants and hotels for free, and make money selling additional content like city guies and navigational services. “A Europe-wide subscription for the spoken turn-by-turn navigation service, for example, will cost 89 euro ($118) a year, for instance, or 9.99 euro a month. Meanwhile, the travel guides from partners including Berlitz International Inc., will cost about 10 euro for a one-off purchase.” As the WSJ points out, this is unlikely to make a huge difference to Nokia’s bottom line in the forseeable future, but by providing the service it will encourage the sale of handsets that use the service.

  3. Mark Carreon Says:

    Fairly properly accurate and nicely written :)

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