Mobile handsets present a unique challenge for application providers in that the interface, computing power and bandwidth constraints are severely limiting. The complexity of wireless networks, and the breadth of diverse platforms and models and vendors add to the difficulties. On top of that they have to deal with the GIS data and mapping on mobile handsets.

Application providers now have to deliver all that at once: Location-based middleware solution, GIS engine, client server, and even (if they plan to make some money out of the application) the ad server.

Seen from this perspective, it’s easy enough to see why so many application providers in the mobile LBS field are struggling, although everybody seems to be saying that the market is booming.

I recently heard about a business model that promises to substantially increase take-up up in the telematics / LBS world. Then I heard about another player thinking along the same lines.

Yesterday I talked to Ofer from Locationet, who echoed what so many seem to be thinking. Bonus point? He's doing very well out of it thank you very much! (Maporama's offer is based on amAze)

So what’s the cool new idea on how to provide LBS services? Well: DON’T.
Let a third party do it for you. Provide a complete sponsorship solution (like navigation for example) to the third party partner. Make it run off-board so the interaction with devices and operators is kept to a minimum.  Provide everything for free to the user and add in little extras like weather and 3D/satellite view with advertising for extra revenue.

The beauty? The operators are kept well away and left to do the dumb pipe work. The partners? Think insurance company, Yellow Pages or …Burger King! Jentro did mention the idea and presented the tools to do just that at the Navigation & Location conference in Amsterdam earlier this month.

However, Ofer is taking it quite a few steps forward: he has customers and a solid business plan that makes it cheap for him to run the app, cheap for the consumer brand to invest/test the “free Burger King Navigator” and very easy to pile up the inventory and attract the advertisers. Of course, as he started working specifically with the Yellow Pages companies as the consumer brand offering the service (and the marketing campaign to launch it), then advertising and content came easily enough.

I am sure you’ll notice this is exactly what Octo Telematics is doing in the insurance industry. If you can’t see the link, then click on this one ;-)