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Wireless start-ups locate new niche

A host of wireless Internet firms hopes to capitalize on the ability to pinpoint subscribers by sending location-specific information directly to mobile phones, pagers or handheld computers.

In a quest for greater public safety, federal regulators may have unwittingly spawned a new niche in the wireless Internet industry.

A host of wireless Internet start-ups hopes to capitalize on the ability to pinpoint subscribers by sending location-specific information such as maps, restaurant reviews, electronic coupons and targeted ads directly to mobile phones, pagers or handheld computers.

The Federal Communications Commission in the last decade implemented a wireless "e911" mandate, which requires cellular carriers to be able to locate their subscribers within roughly 400 feet by October 2001, hoping to solve concerns about emergency response to mobile phone callers. Though several network operators may not make that deadline, the implications are clear: Wireless devices may get a lot more personal.

Already wireless location-based Internet companies, such as, and Go2 Systems, are delivering location-sensitive content to subscribers who have input their ZIP codes or other identifying information. But a handful of technologies, including the satellite-based Global Positioning System (GPS), appear poised to create a new industry--and a new set of annoyances for average consumers.

Cambridge Positioning Systems (CPS) and software maker SignalSoft unveiled a deal today to jointly promote their wireless location technologies for carriers using the GSM (Global System for Mobile Communications) standard. CPS touts its accuracy to within about 50 meters and, combined with SignalSoft's network equipment, will allow operators to offer new location-aware cell phone and wireless device services.

Analysts say the technology and the scramble for location-based wireless Web services may offer a niche market for travelers in unfamiliar cities, but widespread use may be fleeting.

"To the degree that your phone can help you find the nearest movie theater and buy tickets, that's a pretty good application," said Peter Friedland, a wireless industry equity analyst at WR Hambrecht. "But it's not really clear what is going to be the killer (application) for location-based services."

There are a variety of ways to pinpoint where a mobile phone user is located. The least accurate, and the one used today, is to have subscribers input the ZIP codes or addresses of their homes or offices and then send information to them based on that data. More advanced technologies include identifying which cellular base station someone is accessing, giving carriers a rough idea--within about two or three miles--of where that person is located.

Another technology, dubbed "triangulation"--the process of finding someone by determining that person's distance between the nearest three cellular base station towers--offers some promise and greater accuracy. Phones with embedded GPS chips will offer the most accurate information, although they're unlikely to be widely available for at least 18 months, analysts said.

"Without location services Wireless takes center stage, you have to input all sorts of information. But with location services and the arrival of e911, you'll just turn on your phone and find out where the five nearest ATM machines are," said Jonathan Dorfman, a wireless industry analyst at the Strategis Group. "It just makes using the wireless Internet increasingly easier. What's going to make these services take off is their utility."

The services utilizing these positioning techniques seek to allow consumers to request directions to the nearest coffee shop or save money on targeted promotions when shopping--all from their cell phone or wireless device, such as a Palm. New businesses and technologies are latching on to the wireless craze, exemplified by a nearly 25 percent increase in subscriber growth for cell phones in the United States last year, according to a study released by the Cellular Telecommunications Industry Association this week.

"Basically, our goal is to give users a deal every time they click," said Andy Goren, chief executive at

Many smaller and regional businesses don't want to offer elaborate online retail Web sites to sell their goods and services worldwide, executives say. As a result, location-based wireless promotions can help smaller and regional businesses boost the number of customers to their brick-and-mortar stores by directing nearby shoppers to their locations.

"We're trying to drive people into real-world stores," said Lee Hancock, chief executive of Go2 Systems. "It's much more important for them to get foot traffic than it is to drive traffic to their Web site."

The start-ups are busy signing partnerships with chain food and retail outlets, such as Diedrich Coffee and restaurant chain Johnny Rockets, as well as with wireless carriers such as Sprint PCS and Web portals including Excite.

"The fish out of water is what it's most useful for," said Clay Ryder, chief analyst for Internet market watcher Zona Research. "I need it when I'm traveling in Chicago. If I'm at home I know where my pizza place is." recently released beta tests of its GPS-based system in New York City and San Francisco, and it expects to offer the service nationally during the third quarter. Separately, Go2 System's online service last week unveiled a partnership with fruit smoothie maker Jamba Juice and rounded out its board of directors. AirFlash, for its part, has recently signed deals with Inktomi and microbrowser company Pixo.

"There's certainly a lot of money and interest dedicated at these types of services," said Bob Bogard, director of marketing communications for Geoworks, a wireless data firm. "You'll see an explosion of these types of things."

Geoworks operates, a service offering promotions and coupons to wireless users, which is considering using location-based technologies. But Bogard has reservations about the service until the number of location-aware devices reaches a critical mass.

Even the industry's strongest supporters admit that some carriers will be hard pressed to meet the FCC's 2001 deadline for implementing e911 location pinpointing capabilities, which could set back the start-ups. "I don't know if some operators will make that deadline," said Rama Aysola, chief executive at AirFlash.

Others have concerns about the usefulness of location-based services. "This market really is in its infancy. I don't know if there's much out there yet," said WR Hambrecht's Friedland.

But proponents believe consumers will embrace location-based information because it provides context and is more useful than some Internet information services.

"It let's you see around over the hill," Go2 Systems' Hancock said. "If you like Burger King, it might be just around the corner. (We let) you see around the corner, so to speak. It's definitely a convenience item."