Smartphones are navigating us
24. 11. 2010.
The past three years brought a breakthrough in the world of navigation devices: PDA devices used solely for navigation are gradually being replaced by smartphones. In September 2010, 1.5 million navigation-enabled smartphones were used in Hungary, giving momentum to location services, reveals the Report on the Internet Economy published by GKIeNet – T-Mobile.
Ten years ago visionaries at Hewlett Packard created a short movie on how they imagined the future of navigation services. What seemed as a futuristic vision back then has actually become technologically feasible by now, with the imagined services gradually becoming reality around us.
The story shows the typical morning of an average father listening to his voice messages while hurriedly driving to a meeting. He controls the functions by verbal commands, aided by a display projecting the entire process on the windshield. Suddenly a voice warns the driver of an impending malfunction of the car and suggests driving to the nearest shop – while the GPS automatically recalculates the route. At the shop our protagonist is met by a mechanic who greets him by his name and requests nothing but an electronic signature when dropping off the car. As soon as he signs his name on the gadget, a taxi which was notified by the system pulls up so he can make it to his meeting on time.
Obviously, navigation devices were in the early stages in 2000. GPS modules attached to PDAs were the only alternatives to GPS devices suitable only for navigation purposes, and maps purchased beforehand had to be uploaded from a computer. In addition to their price, a major drawback of these solutions was that users were not thrilled about traveling with yet another device in their pockets. As a result, they tended to use them only in the car, and almost ten more years passed until navigation and location-based services really gained a foothold.
Given that integration is stronger than ever, it does not come as a surprise that similarly to the dominance of PCs in the 80s, the Internet in the 90s and laptops and notebooks in the 2000s, this decade features the widespread use of smartphones. Traditional, largely offline PDAs gradually merged with mobile phones with no operating systems, creating the suddenly popular category of smartphones, in which location-based services soon became the standard.
Thanks to the built-in GPS receiver these devices became way more than navigation-enabled mobile phones. The applications we use are able to deliver localized information based on the knowledge of our location, for example they can display restaurants or cafes around us, or allow us to share our actual location with others at any time through a social network site. There are also social applications that allow us to log into a location, which lets us collect points that can be converted to discounts at an increasing number of restaurants, cafes or stores. And if we have a destination in mind, we can take advantage of one of the many point-to-point navigation applications.
Figure 1. Connection between navigation and social services
The best way to understand the opportunities offered by the new developments is to imagine how these new devices might help us cultivate our relationships in the future. If a man wants to surprise his girlfriend with a bouquet of flowers on their anniversary, he needs a bouquet, a place where he can buy it on the way home, and it helps to remember the date of the anniversary and the kind of flowers the girl likes. Some can do this without any technological help, but those who are a little forgetful or simply overworked can take advantage of a smartphone helping the process:
- The phone can pop up a reminder that today is important – it is the anniversary;
- On the way home it can indicate nearby florists that are still open;
- Once at the flower shop we can get a reminder of what we bought last year and what flowers our girlfriend likes or dislikes, and so we can make sure we buy her favorite.
Of course, the flowers can be replaced with any gift or service, and the people in the story can be friends or business partners. Location-based services offer huge opportunities, providing several new and innovative small and medium-sized enterprises with opportunities to enter the market.
Smartphone instead of GPS
According to the experts of the ComScore market analysis firm, the number of people in the British, French, German, Spanish and Italian markets using their mobile handsets for navigation while driving instead of a separate GPS unit increased by 68% in 2009. The firm has found that in these five countries some 21.1 million people use mobile phones for navigation: this number is 700 thousand more than the total number of those who bought a GPS navigation device in 2008 or 2009. The forecast projects that the market will double in the next years, and, given the zero cost the other EU countries will quickly catch up. As a result, the European mobile navigation market may grow to 55-60 million customers by 2014. Juniper Research, another research firm, is forecasting 1.5 billion worldwide users of location-based services by 2014.
Table 1. Mobile navigation users in the five largest economies of the EU (in millions)
Hungary among the developed mobile markets
Though at a slower pace, Hungary is following international trends. According to data by the National Media and Infocommunications Authority, there were 11,832,566 active SIM cards capable of accepting calls in the country in September 2010. This number is more-or-less constant, given that new SIM cards are not always purchased along with new handsets. According to a June 2010 research by GKIeNET, the adult (over 18) Hungarian population had more than 6.5 million mobile phones (83% of the total population had a mobile phone), of which 1.2 million units had a GPS receiver and were web-enabled. 2-2.5 million handsets are expected to be sold in 2010, 20% of which are smartphones with some kind of navigation software. This puts Hungary among the developed mobile markets based on the number of users as a percentage of total population, given that the share of smartphones in the total mobile market will be around 15% at the end of 2010.