deCarta Sees Growth in Domestic, International Smartphone Markets

deCarta Sees Growth in Domestic, International Smartphone Markets
http://www.gpsworld.com/lbs/decarta-sees-growth-domestic-international-smartphone-markets-10346

August 11, 2010 By: Kevin Dennehy
LBS Insider, August 2010


There is no hiding the 800-pound gorilla in the location-based services
market. It’s the smartphone that will drive most LBS services. One
company, deCarta, is finding strong growth powering navigation on
several smartphone platforms. As a future LBS market driver, deCarta
believes that location-based advertising is not only going to be a
strong market, but it is inevitable that it will see growth.


With recent deals with Samsung and T-Mobile, deCarta has been very
successful in capturing a piece of the burgeoning smartphone market. The
company knows the smartphone market will continue to grow — as opposed
to such standalone systems as portable navigation devices, said J. Kim
Fennell, deCarta president and CEO.

“It’s definitely going to be in the smartphone space — and even feature
phones — as opposed to PNDs. Our deals with Opera, Samsung, are
indicative of a market where handset manufacturers, operators, and even
browser companies want to provide maps,” Fennell said. “[This also
includes] mobile local search and routes as a core component of their
offering to end users — who now expect these capabilities to be there in
their mobile service, and in many cases for free.”

The company is enabling Samsung's Opera browser service navigation
services. With that deal and another with T-Mobile in Europe, published
reports say that the company could see $10 million in revenue in the
next year. “They are all separate deals. For Opera, we were selected to
provide maps, mobile local search and routes on the Opera Mini Browser
which today [includes more than] 60 million handsets,” he said. “We will
also be coming out on Opera Mobile and desktop shortly thereafter. We
will be the default ‘maps’ icon on the Opera home page much like you see
‘maps’ on an iPhone.

“With Samsung, we were selected over a year ago to develop all the
Location APIs into their new Bada operating system that is now shipping
with their new phones such as the Wave phone. Developers building apps
in Bada are using deCarta maps, search and routing similar to the way an
iPhone app developer would use the Apple MapKit SDK — except that we
provide developers hundreds of more object classes to work with. So, the
deCarta MapSearch app and our APIs will be launched in over 80 countries
around the world this quarter.”

Jentro, a Germany-based company that recently closed, focused first on
turn-by-turn navigation and then shifted to the connected PND market.
Jentro differed from deCarta in that it did not have the benefit of a
back-end geo-spatial server or a client in the PND space, Fennell said.

The company has increased its data architecture, platform tools for
developers, and scalability, which has powered some of the largest LBS
services over the years, including Google Maps for three years, and more
than 20 mobile operators, he said.

“We think the market is now ready for real growth because all
mobile-phone end users now expect to have maps, mobile local search, and
routes for free on their handsets which drives a ubiquitous LBS market
condition and will require handset OEMs and some mobile operators to
want to offer LBS services as a core part of their offering to end
users,” Fenell said. “Many OEMs and operators are asking for an
alternative to Google Maps so that they can maintain the end-user
relationship, branding, and/or make their offerings more competitive.”

Another market Fennell believes will have strong growth is
location-based advertising. “It is inevitable — as inevitable as
advertising on the PC web. The question becomes what apps will be paid
and what apps will be free,” he said. “For free apps, the user will
understand that they are either paying for it as part of their data plan
to a mobile operator or they will see some small amount of mobile
advertising. The mobile advertising will have to increasingly be viewed
as content and provide some contextual value to the user. We think this
is going to be very big in 2011.”

Insurance Telematics Sizing up as Strong Niche Market

Although a small market, one location-based services niche that seems to
be gaining ground is insurance telematics, which monitors driving habits
through GPS and other technology. The insurance telematics market has
grown from a novel technology to a means of providing valuable data on
the quality of an individual driver, said Chris Carver, program manager,
Liberty Mutual Onboard Advisor.

“Everyone thinks of the insurance company as one that insures cars,
[but] in reality, they are insuring the driver. How accurate is a
driver's credit score in predicting their driving habits?” he said.
“Well, it's only a surrogate but until the cost of accelerometers and
GPS units gets to the point where they are in every vehicle, it will
continue to be a portion of the score an accuracy uses to rate your
insurance policy.”

Carver said that the insurance telematics market today is small because
the cost of the location devices still needs to be factored in to any
program rollout. The insurance industry's dream is that device and air
time pricing will be come cheap enough someday that real-time
information will replace the traditional metrics of driving for the 285
million vehicles on the North American roads today, he said.

Potentially, the market can be huge. “Eventually, years from now, the
insurance companies would like to be able to use the telematics data to
select the best 15 percent of drivers,” Carver said.

Insurance companies view telematics as a safety and security feature
that also has traditional fleet management-type of elements factored in,
Carver said. “We interviewed literally hundreds of personal and business
customers and we've heard concerns about managing fuel costs, employee
efficiencies and, most importantly, safety,” he said.

Carver said the main goal is to decrease driver distraction, which will
in turn allow insurance rates to go down to save private passenger lives.

“On the commercial side of the business, we launched Onboard Advisor
with a very simple principle in mind — if we can provide a business
owner with an easy-to-use tool to mentor his drivers and make them all
slightly better each month, again, we all win. To reward them for taking
this initiative we offer the business owner an initial 15 percent
discount on their insurance,” Carver said. “This can increase even
further if they are diligent about using the scores to coach their
employees.”

Again, the market potentially is huge. Carver’s company, Liberty Mutual
Agency Markets, is a business unit of Liberty Mutual Group, which is the
fifth largest property and casualty insurer in the United States. The
company is the second largest insurer of commercial vehicles — and the
largest insurer of commercial fleets of less than 100 vehicles.

The major player in the personal markets is Progressive, which has a
telematics product filled in most states. “AllState is also a major
player in personal markets, but more on the PAYD (pay as you drive)
initiative in California. In commercial markets, business fleets of two
to 2,000, Liberty is the first company to come to market with a product
that is filed in 49 states,” Carver said. “The other major players in
commercial [insurance telematics] efforts are Hartford and a couple of
regional insurance carriers who focus on heavy trucking."