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Skyhook Wireless Nets Qualcomm as Latest Semiconductor Partner


18 November 2008 - Market Development

Analyst: Chris Hazelton
Sector: Mobile Software

Event summary
  • Qualcomm has announced that it will license Skyhook Wireless' Wi-Fi positioning service (WPS)and incorporate the software into its gpsOne chips.
  • This multimode assisted-GPS (AGPS), GPS and Wi-Fi positioning hardware and software offering will go into fleet management systems, laptops and smartphones.
  • Skyhook has leveraged its deployment on iPhone, which was a software update, into a licensing model for chip vendors Broadcom, CSR, Qualcomm and SiRF.
The 451 take

We had expected Skyhook to parlay its iPhone deployment and Apple alliance into several new partnerships in the mobile space. The Qualcomm win, building on previously announced chip vendor partnerships, gives Skyhook significant traction in both code-division multiple access (CDMA) and wideband CDMA (WCDMA) chipsets. Chip-level integration is no guarantee that device vendors will leverage WPS. But the difficulty in providing positioning data indoors and in major metropolitan areas plays heavily in Skyhook's favor. Urban areas offer ideal use-case scenarios for location-based services (LBS), but are a nightmare for positioning technologies due to multipath errors (GPS signals bouncing off buildings).

Details

Skyhook Wireless is riding the Wi-Fi wave in the smartphone market to provide increased accuracy for LBS. The software and LBS provider has signed on several chip vendors in the mobile space, including Cambridge Silicon Radio (CSR), SiRF Technology and, most notably, Broadcom, which signed on as a licensee last month. Leveraging GPS and Wi-Fi capabilities that are added to more devices, Skyhook's software combines positioning data from satellites, carrier assistance servers and Wi-Fi base stations to significantly reduce positioning, or time to first fix (TTFF). TTFF for some devices can be up to a minute, but the addition of Skyhook's WPS can reduce TTFF to a few seconds. Even with assistance from carrier networks, AGPS is inaccurate at best indoors, since GPS signals cannot penetrate very far into buildings. Skyhook's database of more than 50 million Wi-Fi access points provides an additional layer for positioning information, accuracy not available in dense urban locations.

Competitive landscape

The LBS arena is pretty crowded these days, and is ripe for consolidation; however, looking below the application space into the supporting network stack, there are only a few key players providing the infrastructure. Skyhook has gained the most traction below the application layer due to differentiation and advantages in its positioning data. This is demonstrated by the company's limited success with its end user product, Loki, which is a web-based positioning service. The future for Skyhook is in positioning data for device vendors, which means competition from pure players like TruePosition and Polaris Wireless that support carriers directly. In addition to gaining Apple as a partner on iPhone, Skyhook also gained a competitor, Google. As Skyhook incorporated its LBS technology into iPhone's Google Maps application, the search engine company started working on its own terrestrial positioning service for smartphones. Instead of Wi- Fi, Google is using carrier tower triangulation to provide positioning data for all smartphones, regardless of Wi-Fi or GPS integration. To compete, the Wi-Fi positioning company will need to demonstrate that it can provide better accuracy and value than Google's My Location. In a market where several key players are hesitant to partner with Google, Skyhook's small size may provide a key advantage.

About The 451 Group

The 451 Group is a technology industry analyst company focused on the business of enterprise IT innovation. The company's analysts provide critical and timely emerging-technology insight to clients at vendor, investor, services and enduser organizations - insight that aids both strategic and tactical decision making for competitive advantage. The 451 Group is headquartered in New York, with offices in key locations, including San Francisco, London and Boston. The company also operates Tier 1 Research - an independent division of The 451 Group - which analyzes the financial and industry implications of developments impacting public and private companies within the IT, communications and Internet sectors.

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