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June 29, 2010

There's no question that the battle is intensifying in the mobile apps segment of the wireless industry, especially now that Apple has launched its venerable iPhone 4 last week, with resounding success.

What's more, last week's iPhone apps update added an important piece of missing functionality to the wildly popular smartphone.

Now the iPhone 4 can run third-party apps as a background process. Such a multitasking ability opens up a whole new world of options for mobile apps developers in the rapidly growing segment of location-based social networking, commonly referred to as GPS/Social.

Meet Loopt, a geo-tagging mobile app with a little over 2.96 million users. The mobile app developers at Loopt have now introduced a new version that allows wireless users to update their locations automatically as they move around.

It's a rather big improvement from such rivals as Foursquare which requires mobile users to manually check-in as they visit every place they go. Now all that can be done automatically, thanks to the new Loopt app available for iPhone 4 users.

Loopt's version 3.0 upgrade uses the new iPhone's iOS 4 to let its users continuously share their locations with specific friends for up to 8 hours, with no further action on their part. If a Loopt friend is nearby, a notification pops up. Friends appear on a Loopt map, which updates in real-time. Real cool.

But manual check-ins are still available for sharing with a larger group of friends, however. Loopt developers are hoping to fix that issue with Loopt 4.0 that should be available in the next couple of weeks.

Sam Altman, CEO of Mountain View, Calif.-based Loopt says "This is a huge deal for us, because this is what we imagined when Loopt launched almost two years ago. Background-updating is absolutely the next great mobile app. Everyone else we talk to in the GPS and location space is moving toward it."

GPS and location space is a booming field, thanks to Generation "Y-ers" who have grown up in the Internet age and have no objection to broadcasting personal information of where they currently are and what they are doing.

Overall, the number of GPS and location-based services on smartphones today is largely expected to rise to over 80 million installations this year, a tenfold increase from just eight million last year, according to a report released a few days ago by iSuppli Corp.

And in less than four years from now, iSuppli expects location-based mobile services will soar to 300 million installations globally.

Noah Elkin, mobile analyst at eMarketer, says there's likely room for only two or three sizable location apps mobile providers and potential applicants will need the ant up the creativity if they want to rise to the top of the segment.

"Loopt is one of the older GPS-based apps, but it hasn't been in the news all that much," Elkin says. "Foursquare has added a few content partners, while Gowalla has a few ad partners as well. But that sense of being really different from the others is key to really make a smashing presence in the location-based segment."

And a number of companies are fighting to capture those users as well. In addition to Foursquare and Gowalla, there's BrightKite, Buzzd, and many more. Altman says Loopt tracks about one-hundred companies that are doing something interesting in the mobile location-based segment.

But Altman thinks that only four or five companies will become big names in the location-based field within a few years.

His view is also echoed by Bryan Trussel, chief executive of the app maker Glympse. A former Microsoft exec, Trussel co-founded Glympse almost two years ago. The app pioneered the idea of temporary location sharing. It doesn't require a user account. Rather, users can email a link that shows their trackable, real-time location on a map for short periods of time. For example, users can send a Glympse to clients if they're running late to a meeting.

"When we started up, people says I was crazy to quit Microsoft," Trussel says. "One very accomplished venture capitalist says he couldn't see location sharing taking off. But now there's an absolute perfect storm: the technology, business models, trends are all pointed at location-based tracking in the mobile segment. And now the iPhone 4 will help us achieve our goals."

However, there's one big roadblock to automatic location syncing: The GPS in a smartphone can't rival the precision we've come to expect from car units and other standalone devices. For example, a city street could have several storefronts within a few feet -- and a phone's GPS isn't accurate enough to determine the user's exact location, mainly because the screen is so small.

Altman admits that's mainly why his app's background mode shows only street location -- for example, 58th St. at 8th Ave. -- rather than the exact venues shown with manual check-ins.

"See, the GPS inaccuracy is a big problem for us," says Trussel of Glympse. "At this point, the technology would make it almost impossible to check into exact locations automatically. But we are hopeful we will solve that issue real soon."

And app developers are looking at a few fixes. For example, venues that want to enable auto-check-ins could install RFID chips. "But either way, location-based services will be an integral part of mobile," Trussel says. "A few years from now we'll forget very quickly that there was a time when location wasn't at the forefront."

"The idea of mobile and social becoming one is a big issue for the wireless industry," eMarketer's Elkin says. "We find ourselves with less and less division between the two, and eventually that line may cease to exist. But time will tell, since it's a bit premature here to predict what the outcome might be in the near future."

For its part, Facebook has made a bit of noise about adding location-based services as well. With more than 400 million registered users, Facebook would be the instant heavyweight in the mobile segment and could knock out a lot of the players.

Recently, Twitter also threw its hat in the ring as well, releasing "Twitter Places" a few weeks ago to tag tweets to specific geolocations.

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Source: Loopt.