Smartphone Software Gets Smarter, More Interactive

Context-aware computing draws on vast amounts of data to help consumers buy from vendors that know more about them, too

Ellen Tanowitz has uncovered what may become the envy of every budget-conscious, working parent. She found a simple way to save time and money—while keeping a brood of kids occupied—as she shops for groceries at her neighborhood Stop & Shop.

Her secret? Tanowitz, an attorney from Newton, Mass., uses a hand-held device that lets her scan items the instant she takes them off the shelf; that means no more long waits in a checkout line. The scanner also knows her buying history and whereabouts in the store, and it uses that information to deliver coupons for the items she purchases most. (Her family loves cream cheese, for instance.) Best of all for this mother of three, the device is so easy and fun to handle that it keeps her children busy till shopping is done. "My kids fight over the scanner. They have to take turns because they all love to use it," she says.

Tanowitz owes her newfound savings of time and money to software that gathers vast amounts of information—not just a person's whereabouts, but also such data as interests, buying habits, even social circles. Known as context-aware software, the technology then harnesses that information to provide useful tools to the smartphone user. At Stop & Shop, that can mean money-saving coupons. In other settings, context-aware technology can provide crucial, at-a-glance background information about a business associate or prospective client. Or it may simply aid travelers in finding a place to eat or locating where they parked their car.

For years, technology has been able to pick up a person's location through Global Positioning System satellites that deliver up-to-the-minute traffic and mapping data. But only recently have electronics been able to put a person's location into a larger context. By 2012, the market for information about a person's context will rise to $12 billion, according to research firm Gartner (IT).

interactive scans: "Favorite Places"

Google (GOOG) is at the forefront of companies poised to benefit from this demand surge. The company already has access to loads of data on people and their Web searching habits. "Google knows more about most people than anybody else," says Anne Lapkin, a research vice-president at Gartner. "So they'll be pretty uniquely positioned to take advantage of context and monetize the information that they have." In October, the company released Google Maps Navigation, which provides turn-by-turn mapping for users of smartphones that run the Android operating system.

On Dec. 7, Google made another step toward integrating online and offline context, adding some 100,000 local businesses to its "Favorite Places" feature, which highlights the most popular places searched among users. Businesses added to the list will show up in Google Map searches; users with a camera-phone can go to the business and point the camera at a Favorite Places decal in the window. That opens a Web browser and lets them read user-generated reviews in their device's viewfinder. "What we're trying to do is to connect the real world with the vast stores of information about places in the world that exist on the Internet," says John Hanke, vice-president for product management for geo at Google. "We want to make it easy for people as they're out interacting with the world."

Other companies likely to benefit from rising demand for context-aware technology include handset manufacturers such as Nokia. Two years ago, the Finnish company introduced Ovi, a bundle of Internet services that lets users keep calendars, access files, download music, back up contacts, and other activities. Other contenders include communications vendors such as Cisco Systems (CSCO) and Avaya, large telcos like China Telecom or potentially even social networks such as Facebook, Gartner says.

call center-type data at your fingers

Business people can use context-aware applications to save time while gathering intelligence about contacts. A new service called Gist does this by connecting an e-mail inbox to calendars, the Web, social networks such as LinkedIn and Twitter, and customer-relationship-management software sold by (CRM). The service ranks contacts based on the frequency of meetings, e-mail correspondence, and interaction on social networks. "We go out to the Web, search 50,000 new sources, 20 million blogs, and we grab content from Twitter and bring that information to a central place," says Gist Founder and CEO T.A. McCann. Gist is now free, although the company will offer a premium subscription service in the first quarter of 2010.

Avaya is working on tools that will help business people quickly pull up information on customers, giving access to the kinds of data that call center reps have had for more than a decade. "A lot of the concepts that were pioneered in the contact center are making their way into the enterprise," says Brett Shockley, vice-president of emerging products and technology at Avaya. The company's Aura communications product, released earlier this year, delivers voice, video, messaging, presence, and Web applications. Avaya plans to add features next year that let users easily pull up documents, e-mail, and other records associated with people with whom they collaborate most closely. The company is also adding a feature that mines data sources—from e-mail and phone calls to public databases—to deliver such information as customer purchase history, current weather, and how the customer's favorite football team fared the night before.

Context-aware software is gaining traction in a variety of industries as a way of tracking everything from hospital patients to whether food has been stored at the correct temperature. "We're seeing it emerge in all verticals including health care, retail, food distribution and the automobile industry," says Ray Smets, vice-president and general manager at Cisco's wireless networking business unit.

context-aware computing vs. privacy

Arnold Clark Automobiles, which operates 130 car dealerships in the U.K., has to keep close tabs on the whereabouts of its inventory. About a year ago, the company built a 72,000-square-foot facility that holds 1,500 vehicles. The company has equipped the cars with radio frequency identification (RFID) tags that connect to the dealership's Cisco Wi-Fi network. Now, potential buyers or mechanics can locate those cars within 300 feet. "One of the biggest operational drains is that the mechanic spends time looking for vehicles that need to be serviced in the car park," says Eddie Hawthorne, group managing director of Arnold Clark Automobiles in Glasgow. Now mechanics can locate cars in one-fifth the time, he says.

Analysts warn that context-aware computing brings challenges. Some potential stumbling blocks include the ability to acquire the information needed to provide context, as well as difficulties sharing information with multiple parties across multiple channels. "There are very few standards for context information and so everybody is developing their own way of delivering it," says Gartner's Lapkin. Another big challenge will be figuring out how to ensure privacy to customers and employees who may not want to be monitored so closely.

Still, customers don't seem to be complaining at Stop & Shop. Today the supermarket uses Modiv Media's shopping system, dubbed ScanIt, in 250 of its 575 stores. At any given site, about 6% to 7% of all transactions use ScanIt and those orders come in at about twice the size of the average order in the store, says Bob Anderson, director of customer relationship management at Stop & Shop. Customers appreciate saving time and money and having more control over their shopping experience, says Anderson. During a typical shopping trip Ellen Tanowitz uses two to three coupons. The bigger draw, though, is the time it saves. Says Tanowitz, "I use it because it's efficient for me."

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