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Can geo-location services find the way?

Services that pinpoint locations for cell phone users and others are nearly ready for the masses. But such services could still end up getting lost.

Mass market geo-location services appear to be just around the corner for U.S. consumers, creating the potential of much-needed revenue for wireless carriers. But such services could still get lost along the way.

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Car rental agency Avis this month started selling a service called Avis Assist that lets lost customers learn where they are and then get back on track with turn-by-turn directions read to them over a cell phone.

Others undertaking large geo-location initiatives include Nextel Communications, which recently began selling a new service that pinpoints phones and shows the "bread crumbs," or any number of places a cell phone has been in the last few hours. Later this year comes perhaps the biggest commercial launch yet, when a major U.S. telephone company will start a 411 service for cell phones that provides one's location, said Joe Astroth, vice president of Autodesk's location products.

The entry of big telecommunications carriers into geo-location services promises massive changes for a largely niche industry that currently generates about $100 million in annual revenue by retrieving lost trucks and helping parents keep track of their children.

But there's a significant problem just as the wireless carriers are finally expressing interest in testing the mass consumer waters: Location-ready handsets are in short supply and cellular networks aren't ready yet to support very many customers. That could force delays, and ultimately, changes in carrier plans, observers assert.

"For the consumer, it'll be five years before location is in a lot of people's lives," said Timothy Neher, CEO of , which makes child location bracelets.

Avis' new geo-location service is a good example of both the promise and problems of these wireless services. There are millions of Avis customers, and most have cell phones. But the chances are slim that those phones are loaded with the right software to use the new service. So at this stage of the game, Avis is renting out Motorola location-enabled phones for customers interested in the service.

Like those of its competitors Nokia and Ericsson, Motorola's lineup of cell phones includes only a few location-enabled models. David Rudd, a Motorola representative, said that wireless network equipment makers and handset providers generally must experience a demand before committing to creating large quantities.

"Avis is the first time we're seeing a lot of commercial interest," Rudd said. "Everyone will eventually find use for some location services. It's a great shortcut. But we don't quite know how to do it yet."

Carriers are also not particularly focused on offering these services commercially yet, said IDC analyst Dana Thorat. Instead, they are scrambling to meet the Federal Communications Commission's 2005 deadline for installing technology that lets emergency workers locate cell phones that have been used to call 911, something that's already possible with land-line phones. Selling location services is taking a backseat to avoiding millions of dollars in fines for failing to meet the FCC mandate, Thorat said.

Where are the handsets?
It is difficult to assess how many location-enabled handsets are in the U.S. cell phone market now, but the numbers are likely small.

Qualcomm said it has sold about 10 million location-enabled handsets worldwide. The company would not break out regional sales, but analysts believe most have been distributed in Asia, where an eager audience uses any one of 100 location services.

"That doesn't leave very many for the United States," said Joe Laszlo, a wireless analyst with Jupiter Research.

Qualcomm's location technology uses a mixture of satellites, cell phone network base stations and handsets.

The handsets, known as A-GPS (assisted global positioning service) phones, have radios so that orbiting satellites can locate and then determine a latitude and longitude.

Cell phone networks help out, providing the location of a base station the phone is using. These bits and bytes get worked over by data centers, where maps, driving directions or other services are created.

Carriers AT&T Wireless, T-Mobile USA and Cingular Wireless use a location system created by Cambridge Positioning System. It's less expensive than GPS because carriers don't need to make adjustments to their networks. The location system requires only new handsets.

A CPS representative did not release the number of handsets on the market with its software inside.

But there are likely few, if any, in the United States. AT&T Wireless and Cingular Wireless had been testing CPS handsets but relatively recently switched to a new location technology.

T-Mobile USA is sticking with CPS software, saying it's had more success in testing than did AT&T Wireless and Cingular Wireless. A T-Mobile representative has repeatedly refused to disclose the number of handsets its customers now have.

Economic realities
The brutal economic climate is also hampering another major piece of the location market: cell phone networks. Wireless executives say the downturn has forced carriers to focus more on voice calls, which is what makes them money.

"Carriers are really trying to sell (voice calls) right now. That's what's going to really keep them alive," Wherify's Neher said. "They're sticking to their core competencies."

Regardless, a few carriers are dipping their toes in the water. AT&T Wireless sells a dating service using and location technology. AT&T Wireless determines a phone's position using the location of the nearest base station, an area that encompasses entire ZIP codes.

The search engine will not reveal actual physical locations but lets customers chat only with matches within a specified radius, according to

Nextel is expected to unveil a location service on Tuesday that uses GPS phones. Nextel's 10 million customers are almost exclusively business people, meaning any location service will likely be tailored in that direction.

IDC's Thorat asserts that once the handsets are available and the cell networks are ready, the market will develop eventually.

By 2006, about 52 million people will be using Avis Assist and other commercial products, generating $2.7 billion in the United States, Thorat predicts. But in another sign of handset and network availability problems, she said there was virtually no revenue last year from consumers using location services.

Autodesk's Astroth doesn't paint as gloomy a picture. He said most wireless carriers will be augmenting 411 services with location applications sooner rather than later.

For a sneak peek, go to Italy, where mobile carrier Telecom Italia Mobile began selling a "panic button" service in October, Astroth said. Customers enter the appropriate keypad combination, and then a voice on the other end will offer assistance such as travel directions, the nearest hospital or other location-related items, he said.

"I don't believe we have to wait five years," Astroth said, regarding the United States. "2003 will be the year of deal making and deployment."