GPS Technologies
There are basically two mobile positioning technologies in use today for mobile handsets: satellite-based systems, of which GPS and A-GPS (Assisted GPS) are the existing variants - with more coming - and cellular network-based systems. Of which there are two principal variants, Uplink Time Difference of Arrival (U-TDOA), commercialized by TruePosition Inc. and Enhanced Observed Time Difference (E-OTD), developed by Cambridge Positioning Systems Ltd.

Galileo
New satellite-based positioning systems are being built, or at least planned, in Europe, Russia and Japan. Of these, one called Galileo is the most promising.

It's a project of the European Union (EU), with additional funding from other countries, including China. The EU did not want to rely on a positioning system controlled by the U.S. military, a solution that might be compromised in wartime. Galileo devices will be interoperable with GPS and should provide greater accuracy than GPS alone.

The satellites won't all be deployed until at least 2008, though.

Thematic Variation
The two broad classes of positioning technology are in fact variations on a theme. Satellite-based systems calculate a mobile device's position by measuring the time it takes for signals to arrive from each of multiple satellites of known position. Cellular network-based solutions like U-TDOA and E-OTD measure the time it takes to send or receive signals to or from multiple cell sites.

The principal difference in the variants in both cases has to do with where the technology resides. With A-GPS, the handset includes a chipset with radio and antenna to receive the raw GPS data from the satellites, but it transmits this data to the local cell site for processing—which involves looking up the position of each satellite in an almanac and then calculating position of the device based on timing data.

A pure GPS device such as the Garmin's Pocket PCs and Palm-based products do all the processing in the device.

Advantages, Disadvantages
The great advantage of U-TDOA, which Cingular and T-Mobile use for e911 positioning, is that it works with any digital handset. All of the technology resides at the cell site. E-OTD, which was a disappointment in early implementations in the U.S. but has evolved and is still used in Europe and Asia, works with handsets loaded with special software.

Each of these technologies has its advantages and disadvantages and cost benefits. In terms of performance, the satellite-based systems deliver superior positioning accuracy. They're able to locate a device in optimal conditions—if it's in the middle of a field with no trees around—down to as little as 10 feet.

"That's pretty darn good," Hyers says. "But it points up one of the big issues around GPS and A-GPS. In less than optimal situations where line of sight to the satellite is blocked or occluded, such is in a heavily built-up urban center, they may not get very good reception."

The network-based systems deliver much less in the way of accuracy, and this is reflected in FCC e911 regulations. They require handset-based solutions (basically A-GPS) to locate devices within 50 meters for 67 percent of calls and 150 meters for 95 percent of calls. Network-based solutions are only required to locate devices within 100 meters for 67 percent of calls, 300 meters for 95 percent of calls.

GPS and to a lesser extent A-GPS clearly have the biggest impact on handheld devices, in particular on the economics for manufacturers. On the other hand, A-GPS and pure network-based positioning systems require a much greater investment in technology at each cell site or tower.

Lowering Costs
A-GPS developers like Qualcomm were looking for a way to reduce the cost per handset by reducing the amount of technology that needs to be resident on the handset. The cost per handset for a GPS chipset is currently between $8 and $9, Hyers says. The cost for A-GPS is $1 to $1.50 per handset.

"Handset vendors literally look at pennies: it's such a cut-throat competitive business," Hyers asserts. "I've heard them debate whether to include a six cent data port. So the difference between a dollar and $8 is huge."

Costs for GPS chipsets will come down, though; they may have already from some vendors. And GSM manufacturers will begin installing GPS in handsets to meet the needs of new LBS applications such as turn-by-turn navigation, Hyers states.

What First?
For GSM manufacturers, there is a classic chicken-and-egg situation, notes ABI senior analyst Philip Solis. Until there are lots of in-demand location-based services available, there will be little demand for GPS-based handsets and no real incentives for manufacturers to build them. And cellular operators and other LBS providers won't want to launch services until they see there are enough GPS handsets in use.

"You'll always have that issue with any new technology," Solis says. "They [LBS providers and manufacturers] obviously have to come together and time out their solutions together."

In the U.S., virtually all CDMA network operators are using A-GPS. They have been selling handsets with Qualcomm's gpsOne chipset for the past 18 months. Nextel, the only iDEN operator, and an LBS pioneer, is also using A-GPS.

The FCC requires operators using handset-based solutions to have 95 percent of their installed base of handsets able to use the e911 system by the end of the year. Some, possibly all operators, will fall short and have to request waivers, according to Hyers. The GSM operators, meanwhile, are all using some form of network-based positioning technology, mainly U-TDOA.

Change Of Heart
A few years ago, Hyers says, the cellular operators viewed positioning technology as purely a cost of doing business. While there was some promise of new revenue streams from location-based services, the operators and most analysts did not see those revenues covering the cost of the new technology. That thinking has now changed, he says. There are more applications being developed, and demand for them is growing. Navigation, people and asset tracking and LBS enabling of applications such as Instant Messaging (IM) top the list. In the second article in this series, we'll look at services, who's offering them and who's using them.