Issue link: https://read.dmtmag.com/i/70379
Services Although the ubiquity of LBS is good news for content providers, it also created a (perceived) view that basic map content is becoming commoditized at the user level. In fact, it's clear that building and maintaining high-quality maps requires significant investment, and those costs still have to be covered directly (through licensing) or indirectly (through advertising). As more devices are con- nected, a logical extension of the content model—from revenue and value perspectives—is to incorporate live services in addition to core map content. Real-time traffic is the most obvious and highest value of these services. Today's traffic services work well on major roads and in major markets; the next step in this evolution is to scale to include all roads everywhere. There are several components to this: 1. The creation of open location referencing systems (e.g., TomTom's OpenLR standard) that can tie traffic information to any map anywhere. 2. The ability to fuse multiple sources of traffic infor- mation, including crowdsourced data. 3. The development of an ecosystem that can manage and deliver live content across devices and machines, including smartphones, personal navigation devices (PNDs), connected cars, road sensors and variable-message signs (VMSs). In addition to real-time traffic, new services include local search (eventually reducing the dependency on "on- device" points of interest), weather, fuel price, parking and event information. All these services will create potential direct and, more likely, indirect revenue streams to comple- ment traditional map-license revenue. Their success will depend on how easily they integrate into broader applica- tions, from technical and business perspectives. Applications Applications in the LBS ecosystem can include every- thing from off-board and on-board turn-by-turn navi- gation systems to niche apps like Glympse and Foursquare to integration into larger ecosystems such as Facebook and Google. As cloud computing and con- nectivity become cheaper and more accessible, more apps will be off-board or hybrid. Although there still will be a place for "reference apps," success will be driven by the underlying technology and how easily it integrates into large ecosystems. Monetization and Future Trends The LBS market is expected to grow from less than $3 billion in 2010 to more than $10 billion by 2015. Content and service providers, app developers, opera- tors and OEMs all will be competing for this revenue. To date, navigation applications have generated most of that revenue, but this will increasingly be replaced by local search. Mobile advertising still is in a nascent stage, but it's already clear that users will act TomTom's real-time traffic service fuses data from fleets, mobile devices and editorial sources, delivering such information to PNDs, in-dash systems and smartphones. on mobile ads much more immediately, so click-to-call and click-to-navigate ads are effective. To put this in perspective, Google reported mobile revenue of $2.5 billion—almost all ad driven—in 2011. One of the missing pieces that's key to building out the LBS ecosystem is support for mobile payments. As NFC, Google Wallet and other alternatives become ubiquitous, this will create a closed loop for advertisers, where buy- ing decisions can be followed all the way from the ad or promotion to the point of sale. An important implication of such for-content providers will be the demand for pedestrian and indoor content to enable routing to the point of sale, plus the associated positioning technologies required as alternatives to GPS. Indoor content initially will take the form of higher-level mall and airport maps, but eventually more-detailed aisle- by-aisle layouts for major retailers will be available. Successful companies will be those that most easily and deeply integrate content, services and applica- tions into this developing ecosystem. Companies that can offer location and navigation solutions across platforms (e.g., PNDs, Smartphones, OEMs, etc.) as well as easy-to-integrate APIs to deliver specific content and services will be well positioned to realize such success. Pete Davie is director of Portfolio Product Management at TomTom; e-mail: peter.davie@tomtom.com. JUNE 2O12 / WWW . GEOPLA CE . COM 29