Location, Location, LocationVia Cell

Cell phones that track people's whereabouts may please sociable youth. But others worry about mobile presence's potential for privacy abuses

As with most cutting-edge wireless technologies, the ability to keep tabs on a friend's whereabouts via cell phone first took off in Asia. There, wireless carrier SK Telecom was among the pioneers of a service it calls "find friends," which provides a readout of a cell phone user's friends and loved ones—right on a handset screen. The capability is gaining ground in Europe (see BusinessWeek.com, 10/13/06, "Europe Takes to Location-Based Cell Service,") and as of last year has made its way to U.S. shores.

Verizon Wireless, owned by Verizon (VZ) and Vodafone (VOD), and Sprint Nextel (S) are among U.S. carriers that have introduced so-called mobile presence applications. For instance, Sprint Nextel's youth-oriented Boost Mobile in November began offering Loopt, a kind of social mapping software for the MySpace generation, on a trial basis at no charge (see BusinessWeek.com, 12/4/06, "Upward Mobility,"). Helio, a joint venture between SK Telecom and Earthlink (ELNK), also includes a youth-targeted GPS-tracking program called Buddy Beacon in its service packages.

"Wild West"

If all this people-tracking technology sounds a bit Big Brother, it is. And it's hardly new. As of 1999, the Federal Communications Commission has required that cell phone companies implant location-tracking receivers in handsets, but carriers have traditionally limited the use of these receivers to emergency situations amid concerns they could be used to invade privacy.

Businesses have recognized the potential of location-aware technology and use it for tracking shipments and a host of other purposes (see BusinessWeek.com, 10/09/06, "Radio Shipment Tracking: A Revolution Delayed,"). Carriers increasingly want to harness the technology for consumers as well. "What we're seeing now is the second generation of this technology just hitting the market," says Darren Koenig, wireless market director for Tele Atlas, a company that provides map data for applications such as Google Maps (GOOG), Mapquest (TWX), and TomTom (TOM2), as well as Loopt and Buddy Beacon.

But providers of services that help wireless users track friends and loved ones are still finding their footing, Koenig says. Consumer applications, he says, are still in an experimental, "Wild West" phase. "Everybody's tweak is a bit different now." One version of mobile location-tracking applications is aimed squarely at young socialites. "As soon as you walk out of a class in college, people pull out their cell phones," says 21-year-old Sam Altman, who started Loopt last year while on leave from Stanford University's computer science program. "And the chief question they have for their friends in this scenario is, 'Where are you?' I just thought this should be automated."

Selling Strategies

For $2.99 a month, Loopt users can invite others into their network, where they will appear on a live Friends Map. In addition to locating friends, they can tag a good restaurant or record shop to share with others, and receive an alert when a friend is nearby. Of Loopt's roughly 40,000 registered users, a majority are age 14 to 30, Altman says. Having reached an agreement with Boost, Altman envisions expanding to other carriers, or being compatible with all of them, and attracting other segments of the nascent market.

One other such potential market is parents of preteens and young teenagers. A variety of services, including Verizon Chaperone, gives parents the ability to monitor their child's whereabouts. Compared with "social mapping" applications like Loopt, these services are more expensive and offer more sophisticated tracking services. For $19.99 a month, subscribers to Verizon Chaperone can set up a zone in which they expect their child to stay, like a school or summer camp. If the child wanders across the perimeter, an alert is sent to the parent's handset. For a $30 subscription to Guardian Angel Technology's Web site, parents can check on a child's movements, which are updated every seven seconds and can be accessed an unlimited about of times. Parents can even check the path a child has taken as many as 30 days ago, and monitor how fast they got there.

Privacy advocates say these services are susceptible to abuse. "Fundamentally you have to be concerned that all computer security can get broken," says David Holtzman, author of Privacy Lost: How Technology Is Endangering Your Privacy. "If one incident of child molestation occurred because of this technology, you can bet that all manufacturers would completely change what they're doing overnight."

Loopt lets users turn on a "privacy mode" at any time, and requires users to know a person's phone number before that person can be added to a network. Privacy concerns or no, carriers still need to figure out exactly how to pitch users on location-based services. "Over the next year or so, the big question [in mobile phones] is, 'How will you sell location?'" says Dan Benjamin, a principal analyst at ABI Research, a market research firm. "It could be social networking, it could be child tracking, but it will likely involve taking it further than that. Presenting these technologies in a way that is palatable for consumers is the real challenge."

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