Who will win - the device manufacturers, the carriers or the applications providers?

Implications: Following Nokia's recent investment in Navteq and Apple's announcements last week about having full GPS on the iPhone, T-Mobile announced an investment in DeCarta, a leading provider of mapping tools and location based services. In the article, DeCarta CEO Kim Fennell states that he believes that Nokia and Apple will introduce their own set of location based services, but that they will be tied to a particular device.  Since T-Mobile is device agnostic as a carrier, it will be interesting to see what they have planned to leverage the investment in DeCarta.     

Analysis: I am an expert in Consumer Services, specifically in the travel and hospitality industries, an industry group that has largely ignored the importance of location based services.  I also have an entrepreneurial interest in the mapping, navigation and location based services sector in my role as CEO of LeisureLogix.

Over $137b in travel is sold online in the US, out of a whopping $1.4 trillion market.  Another $129b is sold via travel agencies.  That leaves $1.1 trillion in spending by Americans within our borders that is not addressed by the current players in the travel industry. 

7 out of 10 of the top keywords used for search in the travel category involve mapping and driving directions.  It would appear in the analysis of these keywords (as provided by that Mapquest is the only one that is cashing in on the travelers that are asking for help in getting to their destination. 

The online sites (Expedia, Travelocity, Orbitz, Priceline) have incorporated a mashup of maps and their hotel databases, but have done precious little else to leverage the availability of location based, content rich search.  These systems are largely driven by the technology and databases of the Global Distribution Systems, where there has been in excess of $30b in private equity investment in the past 36 months (Sabre owned by TPG and Silverlake, Travelport's Apollo, Galileo and Worldpsan brands owned by Blackstone and Amadeus owned by BC and Cinven).

The GDS systems are largely used by travel agencies, who do not have tools today to assist those that are driving on their trips versus flying.  Air travel represents just 12% of all travel in the US, with 88% driving.  With the crisis facing the airline industry today, it would appear that there is a significant market to marry travel planning tools, with location based services and the mapping/navigation elements.

My company built our product using DeCarta technology, so I am hoping that with T-Mobile's investment in DeCarta, T-Mobile will begin to realize that the usefulness and relevance of the actual applciations that are offered to the traveler over their services, irrespective of the device used, is what is going to drive utilization.

The applications have to be practical and a part of our every day lives in order for them to be used and the content must be relevant and personalized. 

I enjoy Google Earth as much as the next person, but have yet to really see a practical application of it that would compel me to use it on a mobile device.  I know that these applications are coming and I anxiously await them.

It is my hope that 2008 will be the year that convergence between these industries begins to occur.  I believe the mapping and navigation industries, as well as location based services companies must wake up to the opportunity in the travel industry.  And conversely that the travel industry will see that they are missing a big piece of the pie by focusing on a shrinking air traveler market.

When they all wake up, we'll be there, as will rising profitability for all.