The 3G iPhone: Good Things Come in Threes

The blogosphere and news media are abuzz this week over the launch of the hotly anticipated 3G iPhone. In case you live in a cave, a new iPhone that will be half the price ($199-$299) with double the download speeds of the first generation will be available July 11.

Among its many new features, local search arguably stands to benefit the most, even though it’s probably not as sexy as the social or gaming apps that we’ll see roll out in the coming months.

One of the device’s biggest talking points is new GPS capability. GPS will complement the iPhone’s existing location awareness that utilizes Wi-Fi and cell tower triangulation to fix on a location and deliver local search results accordingly.

Though GPS is more accurate (down to the meter level), it drops off in urban areas and indoors, where Wi-Fi positioning shines. Having both will allow the 3G iPhone to switch back and forth when situational factors dictate the optimal technology.

Closing the Loopt

Nuts and bolts aside, the loop will be completed with mobile local search applications for all iPhone owners. The seed was first planted with the groundbreaking open development standards offered with the October release of the iPhone’s SDK. Now these apps have been given a home in the iPhone’s new App Store.

Already, we’ve seen a few mobile local search apps announced. Location-based social network Loopt shows users where their friends are on a map, and its new native iPhone app will have the ability to send recommendations or invitations for local businesses.

“You will never have to eat alone, or at a bad restaurant again,” said Loopt’s CEO Sam Altman on stage during the iPhone announcement.

AT&T’s has also been quick on the draw, with a 3G iPhone application that similarly lets users save and share local business listings with friends. And popular local reviews site Yelp has revealed that it’s working on an iPhone application that will let users save and share restaurant listings and photos while on the go.

Automated voice search applications are also being developed for the 3G iPhone. This follows closely behind the voice search use case that has proved effective in longstanding mobile local search services, such as directory assistance.

Building a Business Model

Each of these products position social media as a killer app for mobile, along with local search. The combination of all three makes sense, as they go hand in hand in lots of situations, such as letting you see who’s around you, and how they might relate to you in any way, such as LinkedIn, or Facebook.

Walking into any public or social venue with the ability to see and be seen in this way (on an opt-in basis) could be well received among a generation of social networking and mobile mavens. This could introduce entirely new ways to think about mobile, and a whole new batch of mobile products built on them.

The iPhone techno-elitist crowd that makes up its early adopters could be the perfect base to get this mobile social graph started, given the camaraderie among its ranks. From there, it could grow in sync with greater iPhone penetration that will come with cheaper and faster product generations.

The question is, will the development-to-market timeline and the social acceptance of these new mobile/social applications be in step? And what local search mash-ups will we see, given that bars and restaurants are a central part of this vision?

Advertiser adoption of mobile marketing isn’t yet at the point where there are comprehensive paid listings from local businesses; and usage isn’t yet great enough to compel them. But as usage rises, we’ll see advertiser interest follow, and viable business models could be formed at this intersection of mobile, local, and social.

With more time, product development, and spikes in user adoption, these applications could even rival the traffic and monetization potential of top online local search sites. It can be argued that mobile is a closer relative to local than online search.

Steve Jobs seems to think so: “Location-based services are going to be a really big deal on the iPhone,” he said on Monday while showing off the new device. And he has a pretty decent track record.

Join us for SES Toronto, June 16-18 at Metro Toronto Convention Centre (South Bldg.).

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