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Mobile GPS: Part 1 – Behind the Rise of Location Services

Real estate, they say, is all about location, location, location. That is quickly becoming true of wireless communications as well.

Technology and market trends and government regulations are all converging to create a new set of capabilities for mobile phone and smartphone users, not to mention a new market for mobile operators and providers of location-based technologies and services.

In this article, the first of a three-part series, we'll look at the movers and shakers driving and technology behind this emerging market.

e911
The seeds of the mobile location-based services market were initially sown in the U.S. back in 1996 when the Federal Communications Commission (FCC) began mandating improved e911 service for mobile phone users. If mobile users dial 911, the federal regulators said, the cellular operator must be able to relay accurate information about the caller's location to the Public Safety Answering Point (PSAP) where the call is received.

Although deadlines for operators to meet FCC e911 requirements have been postponed on more than one occasion, most carriers are now close to complying with Phase II e911 regulations. And while regulated location accuracy isn't quite optimal for some commercial applications, it helps set the stage for the long-anticipated blooming of a location-based industry for the mobile market.

GPS In Hand
Government regulation has been the principal driver, but the slow emergence and adoption of consumer devices that use GPS (Global Positioning System) data broadcast by U.S. military satellites is another key enabler.

Before we continue, here's the short course on how "traditional" GPS works:

A GPS receiver gathers pulsed signals from as many of the two dozen or so GPS satellites orbiting the earth as it can lock in. Using triangulation -- by measuring and comparing the travel time of individual signals -- the receiver calculates its position, and it's accurate to within twenty yards or so.

Handhelds with built-in GPS chipsets—designed primarily for turn-by-turn navigation applications—started to appear a couple of years ago.

Garmin Ltd., MiTAC International Corp. and others have Pocket PC and Palm-based products in this category.


Garmin iQUE 3600:
First GPS-Enabled PDA

Hewlett-Packard's (HP) hw6500 Pocket PC phone series is a quad-band phone with GPS built in (see Preview: iPAQ hw6515 - HP's Smart New Smartphone Entry). It has been released in Japan and Europe, and will soon bow in the U.S. and Canada as well.


                            iPAQ hw6500

Revenues
According to Location-Based Services, a report published by ABI Research earlier this summer, revenues from all location-based services (LBS) in North America—including many not available to handset users—will grow from $420 million in 2005 to over $4 billion in 2010. ABI says that by 2010, 15 million handset owners will be paying for location-based services.

In the Asia-Pacific market, where 10 million handset users already subscribe to LBS, the total number of subscribers by 2010 will top 67 million.

Directionless Operators
Those forecasts represent radical revisions of the first predictions about the growth of location-based services. "So much of what we thought was going to take off five years ago just didn't happen," admits principal wireless analyst Ken Hyers, author of the recent ABI report. "Everything was in place then, except the operators. The operators just didn't make the move."

For operators, providing positioning information for e911 was an unanticipated cost of doing business that they were in no great hurry to incur. However they choose to meet e911 requirements - and there are two distinct ways of doing it - it was going to cost money.

Furthermore, the technology was not immediately available and, when it was, it sometimes didn't work as advertised. except the operators. The operators just didn't make the move."

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.

Mobile GPS: Part 1 – Behind the Rise of Location Services