Mobile Local Search: A Perfect Storm

The Consumer Electronics Show (CES) showcased the first few devices that run Google’s much anticipated Android operating system.

Among the prototypes exhibited was the GW4 from Chinese mobile company Winstron, which has a 2.5-inch touch screen, WiFi capability, a 2MP camera, full QWERTY keyboard, Internet browser, weather, e-mail client, and MP3 player.

Inflection Point of Mobile Local Search

These are the first physical signs of what will be a major inflection point in the history of mobile devices and mobile local search. To be fair, the iPhone played a large part in this inflection point and laid the groundwork for it to happen.

Specifically, Android and the iPhone will erode the carrier control that has stifled innovation in the mobile world thus far. Until now, any incentive to innovate mobile applications was killed by the requirement to pass through the filter of each individual carrier for various model phones and operating systems. Telephone companies proved not to be the best arbiters of product innovation (duh).

So what’s different now? The adoption of open and standardized platforms (both Android and the iPhone’s SDK to be released next month) will open the floodgates of innovation and make it easy for third-party application developers to bring their apps to market.

The splash made by the iPhone, combined with the cache of Apple and Google, has caused carriers to play ball. Apple bagged AT&T, the largest U.S. mobile phone carrier for the iPhone; Google’s open handset alliance (announced in tandem with Android) contains 30 members including carriers (Sprint Nextel, T-Mobile) device makers (Motorola, Samsung), online companies (eBay), and chip makers (Intel).

Upward Mobility

The level of open and decentralized innovation that Android will enable is similar to that we’ve seen flourish on the Web. There’s a great deal in store for mobile search and entertainment apps. Local search and mobile search, a hand in hand relationship, will be one of the biggest beneficiaries of this new mobile environment.

Software and operating systems aside, we’re also reaching new standards in hardware as the bar has been significantly raised by the iPhone. Given new hardware paradigms such as touch screens, new applications are possible, such as advanced mapping and Web browsing. Give it time for new hardware standards to inspire even more software interfaces and functionality that we haven’t thought of yet.

Local Mobile Search: Beyond Early Adopters

More importantly, the iPhone’s splash will make these devices and apps reach the mainstream and bring mobile local search beyond an early adopter medium, where it’s teetered for years. Larger screens, touch screen functionality, and the ability to view Web pages in their full (non-WAP) HTML versions, is creating a level of appeal we’ve never seen before in mobile devices.

This is a level that will be great enough to convert the masses to mobile search, compared to today’s inferior standards (WAP browsers, small screens, small keypads) that have only been able to attract a relatively meager set of early adopters. This mass appeal will also accelerate as prices come down and copycat devices enter the market to compete on price. We’ve already seen an iPhone clone from Verizon.

This perfect storm of factors has finally happened and will bring the mobile search world where it needs to be. There’s no going back. Rising usability standards and corresponding usage growth are the first steps that we’re seeing now.

More substantial monetization strategies are less clear, but they’ll follow. The Kelsey Group’s U.S. mobile forecast calls for mobile ad revenues (consisting of Ad-Sponsored Voice Services, Mobile Search and Browse and Multi-Modal Applications) to grow from $33.7 million to $1.42 billion by 2011, a 116 percent compound annual growth rate.

Think of it this way: The mobile local search industry at this moment is where the online local search industry was circa 2004. Since then we’ve seen a great deal of attention and investment (and some hot air), devoted to local search.

The next 36 months will be mobile local search’s turn to shine.

Click here to tell me your thoughts on mobile local search.

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