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Continued ...

With any talk of advertising, Google cannot be far away. The search giant's mapping application, Google Maps, supports most J2ME phones, Windows Mobile, S60, Palm, all colour Blackberry devices and, of course, the iPhone. All-in-all, that's well over 50% of devices selling in the market today. But a mapping application sitting on a mobile device without any location-aware capability handicaps advertising opportunities. It was therefore unsurprising to see this week's release of version 2.0 of the Google application with the 'My Location' feature. My Location uses cell ID information to approximate a user's position. It is much less accurate than GPS - ranging up to 500m - although in urban areas where cell towers are spaced more densely, accuracy is higher. Having tested the feature a couple times in London on the Orange network, the accuracy is pretty decent. It is only a matter of time before we see Google bringing the mobile phone, mapping, location technology and advertising together in ultimate symbiosis.

Getting back to my opening predictions: it would be valid to ask, why would Apple want to embed GPS? Particularly as the additional radio hardware will increase the cost of the handset and affect the ease with which all the componentry can be assembled within the sleek form factor which Apple demands. While Bluetooth, Wi-Fi and 3G supports Apple's business model for content download and playback, where's the revenue opportunity angle for GPS? If most phones released in 2008 were to have GPS then Apple may well be forced to integrate the feature so the iPhone is not seen lagging the technology curve, but according to ABI, less than 15% of phones will ship with GPS next year.

It is well-known that Apple has negotiated a generous portion of the service revenue for each iPhone user with each of the national operators it has entered into exclusivity partnerships with. Embedding GPS will provide an accurate positioning technology on the iPhone, particularly if enhancements like Assisted-GPS are supported. This may present the opportunity for Apple to enter into exclusivity deals with an application provider like Google, allowing Apple to secure a share of the iPhone's location-based revenues.

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