Mobile phones that track your buddies

Boost Mobile, a so-called mobile virtual-network operator owned by Sprint Nextel, will offer a two-hour demonstration of buddy-tracking technology created by a start-up called Loopt. The start-up, founded by two Stanford University graduates while they were still students, is the latest to offer a mobile-tracking system that enables people to do things like get a bead on friends' whereabouts.

It certainly won't be the last. For nearly a decade, technology visionaries have talked of a day when people would be able to use their cell phones to get directions, track their friends, keep tabs on their kids or simply find the nearest coffee shop. Now those services are finally starting to take trickle into the marketplace.

"The most common text message that people send is, 'Where are you?'" said Mark Jacobstein, executive vice president of corporate development for Loopt, which is partnering with mobile operators to offer a mix of social networking and so-called location-based services. "So the ability to automate that becomes a really valuable service."

Of course, other companies have similar offerings. Dodgeball, bought by Google last year, connects thousands of customers in 22 major U.S. cities with a service that enables users to type in a location and broadcast it to their friends.

Mobile virtual-network operators Helio and Boost have developed services to automatically track and alert people about their friends' location. Other services, such as Groundspeak's Geocaching, let cell phone users participate in a mobile scavenger hunt. And Verizon Wireless, Sprint Nextel and Disney Mobile have offerings that help parents track their children's cell phones.

These companies could be on to something. If analyst predictions are correct, more than half of the cell phone users in the United States will be using location-based services by 2010. That's a staggering figure, considering that, as of today, less than 2 percent of the 219 million U.S. cell phone subscribers have even tried using one of these offerings, according to IDC.

That's expected to translate into big dollars for the cell phone industry. In 2006, location-based services generated $150 million in revenue. By 2010, it's expected to generate $3.1 billion, IDC said.

"We're still very much in the early stages of adoption," said Scott Ellison, vice president of wireless and mobile communications at IDC. "For the past five years, our research has indicated that end users have understood how they want to use these services, but the industry as a whole has been reluctant to offer it as a commercial service."

Putting privacy issues to rest
While mobile operators see potential in offering location-based services, they've been concerned about privacy issues and the accuracy of the technology. But as the technology improves, and privacy concerns are dealt with, new services are popping up left and right.

Loopt, founded in 2005, offers a mobile tracking service that enables cell phone subscribers to share their real-time location status, messages, photos and other on-the-go information with their friends from a mobile phone. Using Global Positioning System (GPS) technology, the application automatically updates the location of a user's "buddies" and displays the information directly on a map on the phone. Alerts can also be sent to notify subscribers when a friend is near.

During a demonstration of the prepaid offering Tuesday morning, people will be able to win prizes like Knicks tickets and consumer electronics by using the Boost handsets to locate Boost representatives throughout the demonstration region.

The service has already been available on a limited basis for the past six weeks. Already, 40,000 subscribers have signed up, with about 5,000 new subscribers being added every week, said Sam Altman, the 21-year-old CEO of Loopt. Boost plans to pump up those numbers with a multimillion-dollar advertising campaign starting Monday.

The service is free to any Boost subscriber until the end of 2006. Next year, subscribers will be able to try the service for 30 days for free; after that, it will cost $2.99 a month, including a mobile-blogging tool.

The launch of the Boost Loopt service comes a week after Helio, an MVNO (mobile virtual network operators piggyback on or contract with bigger networks) backed by Korean operator SK Telecom and EarthLink, kicked off its own location-based buddy service. Like Boost, Helio targets young hipsters, which experts say are more likely to use location-based services for social networking.

By Marguerite Reardon
Staff Writer, CNET News.com