Tuesday, January 18, 2011

Goodbye LBS, Hello Location-Awareness: The Groupon Example

I have been having several conversations, interviews and online debates around LBS, the opportunities for LBS services and the degree of hype of LBS (for example, compared to Augmented Reality).

This has made me come to two conclusions:
1. There is confusion over the difference between LBS and Location-Awareness
2. There is a lack of awareness (excuse the pun) that LBS no longer exists

I have to thank Tomi Ahonen for helping me crystallize my thoughts on the subject.

There is still a great deal of misunderstanding in the use of the term 'location based services'. This term is now outdated-services that simply provide location and nothing else are a thing of the the last decade.

We now should refer to these as 'Location-Aware applications' or location-aware services..Why? Because location is a feature not a service in its own right. As such, location is being embedded everywhere, because it is phenomenally useful on mobile devices. 

Take Groupon, for example. Billed the fastest growing company in the US in 2010, with over $500m in revenues for that year, Groupon has built a global success story based on offering localized offers and discounts via e-coupons. Last but not least, it became profitable after six months.

Given that Groupon is a location-based service with a full suite of location-aware applications, we could argue that it is a LBS (and a very successful one at that). But location is not the service it offers, it is merely a feature of its service (location awareness allows nearby offers to be delivered more easily).

This is not simply a question of semantics. The point is that location has allowed Groupon to unlock a great deal of value for its service by being embedded within it. In a similiar fashion, location awareness is allowing and will allow a great deal of businesses to create value within their mobile service.

Are location-aware services over-hyped today? I don't think so. On the contrary, I think most companies are only just beginning to realize the huge potential of embedding location (and accurate location, at that) within their mobile offer or service. 

We can safely close the door on the world of LBS (it was a hell of a ride) and say hello to the world of 'location-everywhere' with location-awareness increasingly embedded as a feature on the majority of newly launched mobile services.

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