July 30 (Bloomberg) -- Becca Ludlum knows better than to expect her teen son, Michael, to call home as he skateboards from the mall to the park to friends’ homes on long summer days.
Ludlum instead relies on a downloadable smartphone application called Life360 that uses satellite signals to follow the kid’s comings and goings.
“If he’s late to dinner, I can check where he is,” said Ludlum, a 36-year-old blogger from Tucson, Arizona. “He is not going to call me every time he gets somewhere -- he gets embarrassed.”
As teens in growing numbers adopt smartphones with global positioning system technology, they’re easier to keep tabs on using mobile apps like Life360. This rising tide of tracker apps creates a host of new ways for families to stay connected and coordinate schedules even as it heightens concerns about young people’s privacy.
The percentage of 13- to 17-year-olds using mobile phones rose to 70 percent last year from 58 percent in 2012, according to Nielsen. A reflection of the rising number of kids on phones, Life360 Inc., Glympse Inc., TWT Digital Ltd.’s ZoeMob and other developers of location-monitoring software have seen downloads jump at least 50 percent this year. Apple Inc.’s iPhone also comes with a widely used location feature, called Find My Friends.
“Even small children are getting smartphones, and that, of course, expands the addressable market significantly,” Andre Malm, an analyst at Berg Insight AB, said of the market for location-based apps.
About 25 million people in North America used location services daily at the end of last year, according to Berg Insight. That number could double to 50 million by 2018 as more free apps come out and smartphone use grows, the Gothenburg, Sweden-based researcher said.
“The big prize is to own the family network,” Alex Haro, president of San Francisco-based Life360, said in an interview. “Families are the last real-world network that haven’t gone online yet.”
Introduced four years ago, Life360 is adding 2 million new users a month, and just passed 100 million members, up from 63 million at the end of 2013. ZoeMob has notched up 2.3 million downloads this year, for a total of 7.3 million. Glympse, based in Seattle, has experienced its fastest growth in the past four months since the app debuted in 2009, according to Chief Executive Officer Bryan Trussel.
Part of the growth is being fueled by parents handing down their old phones and cheaper prices for smartphones, making them more available for children. The average selling price for smartphones is projected to decline to $260 in 2018 from $308 this year, according to researcher IDC.
Smartwatches and other wearable devices could also spur wider use of tracking apps, with companies including LG Electronics Inc. and VTech Holdings Ltd. already rolling out products designed for children. Apple is said to be working on a smartwatch as well.
Sensing an opportunity, venture capital is moving in. Glympse raised $12 million in June from Ignition Partners, Verizon Ventures and other investors. Security company ADT Corp. led a $50 million financing round in Life360 in May.
AutoNavi Holdings Ltd., a Chinese map software company that’s being acquired by Alibaba Group Holding Ltd., bought Alohar Mobile, a startup that introduced a new family-tracking app called PlaceUs on July 23. Sao Paulo-based TWT Digital just raised an undisclosed amount of funding in a recent round.
“When you think about families, we haven’t scratched the surface,” Daniel Avizu, TWT Digital’s CEO, said in an interview. “It’s a huge market, and there’s a lot of space for everybody to grow.”
Because family-tracking software keeps data on identities and exact locations, privacy controls are a key consideration for developers of the programs. Most apps let users turn their location-monitoring on and off, and require them to go through an extensive opt-in process.
The apps are also designed so that only a pre-defined group of users can access individual locations, rather than making tracking data publicly available.
“People don’t value their privacy that highly and don’t think through the implications,” Roger Entner, founder of researcher Recon Analytics LLC, said in an interview.
Location apps are also going up against wireless carriers, which already offer tracking services for customers as add-ons to mobile phone and data plans. AT&T Inc. and Verizon Communications Inc. charge $10 a month for similar services, generating as much $120 million in additional revenue for themselves and other carriers in North America last year, according to Berg Insight.
The tracking apps, which use satellite data and other data to pinpoint locations, are usually free and offer additional features for a cost. While they could siphon sales from wireless providers, the apps could also boost data usage. Verizon, whose venture arm invested in Glympse, is betting that location apps can help the carrier sell more data plans, Haro said.
“What is important to Verizon is to provide the customers with what they want,” said Laura Merritt, a spokeswoman for New York-based Verizon.
Premium features also enable uses that go beyond finding out where family members are. Parents can receive alerts if a teen driver is exceeding speed limits, and users can get emergency help or contact a personal assistant.
“Our goal isn’t just to track your children, but your pets, your elderly parents, your car,” said Michal Stencl, CEO of Sygic, which develops several location apps for finding people, measuring speeds or monitoring traffic.
By linking up with automobiles, wearable devices and home-security systems, family-tracking app companies are betting that they will be able to help users manage all facets of their lives. Life360 is working with ADT on using people-tracking to improve home security, for example.
“If the entire family leaves the house, we can automatically power the security system, turn off the lights and close the garage door,” Life360’s Haro said.
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