The company recently signed a deal with software and map maker Webraska, adding the final pieces of content needed to start its onslaught into the wireless Location Based Services (LBS) market, a $20 billion industry that is the latest scorching-hot sector in the wireless arena.
LBS technology begins with a basic idea that with an embedded chip, anything or anyone can be located anytime. Companies are already using it, for example, to locate a car that needs service. Various forecasts say the LBS market will top $20 billion in 2005, and LBS will amount to 10 percent of the $1.8 trillion transactions made wirelessly.
IBM's deal with France-based Webraska, unveiled at the GSM World Conference in Cannes, France, should help speed up the expected launch of several Big Blue items to telecom companies and automakers, said Val Rahmani, general manager of IBM's wireless division.
It's also putting IBM into the middle of a fierce battle for business. Providers have been shelling out billions for new mobile frequencies and to build the infrastructure for third-generation mobile phones expected to hit the market this year. Now they need to make up for the spending spree and simultaneously find new ways to make cash now that mobile phone sales are slipping.
The focus, analysts say, has shifted to LBS. There are a few LBS systems in place already, mainly in Sweden and the United Kingdom, with North America lagging well behind.
But that doesn't mean there is nobody in the business of making LBS systems. IBM's competitors include software maker Autodesk, which said it plans to spend $30 billion to make LBS systems. It's won customers like Palm and Italian carmaker Fiat.
Cambridge Positioning Systems and software maker SignalSoft are promoting their wireless location technologies for carriers using the GSM (Global System for Mobile Communications) standard.
There is also U.S.-based Airflash, which is already working on the Orange Telecom system in Europe. One service the company offers is a form of instant messaging that will be sent to friends only within a certain area of a specific location.
Most of these companies will have been in business at least a year before IBM's planned launch of its own set of LBS services. But Rahmani denies that IBM is late to the game.
"We weren't really on the sidelines," she said. "We've been talking about this for a long time. We'll see these things happen very fast."
Analysts say IBM is moving in the right direction with its new push, but should be wary of the same type of money-gushing forecasts for LBS that helped dampen the wireless sector with unreachable expectations.
In addition, Keith Waryas of market researcher IDC said telephone companies may not be as willing to work with other companies, especially those asking to provide the locations of its customers.
"Telcos aren't that willing to give up that information," he said.
As part of the IBM deal, Webraska's wireless navigation software will become part of IBM's hardware for its e-Server Pseries, which IBM says is the all-time best-selling high-end server. It will also become part of IBM's middleware baubles.
Beaming travel directions to a car, or letting people find out where the nearest Burger King is, are just two of the more obvious services IBM plans to offer mainly to ISPs to sell to their customers, Rahmani said.
IBM is also working with automaker Citron, which has already begun embedding some of its cars with IBM hardware.
Also in the works is embedded hardware in a wearable device that can monitor someone's pulse and other health indicators, then alert medics of a person's location and needs if an emergency occurs, she said.
Tracking parcels using an embedded chip is another of the services IBM has plans to offer. With this technology, "you can find out where a package is at any time, even if it's a gift that ended up in the garbage," she said.
Companies like Federal Express use the same type of inventory tracking, but without embedding chips. Instead, the packages are tracked by a bar code on the address labels that have to be read at service centers.