Location Based Search -The Game Changer in Mobile - Who will be the Ultimate Winner? Apple? Google? Microsoft? RIM?

09/08/2011

By Srini Katta

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Analysts are often so focused on smart phone device features that they often fail to see the next big thing in smart phones – location based search capabilities.

Probably not exactly what you were expecting to read, but here’s an example.  Yesterday, I read that RIM stock was up 5% even though the market was down 1%.  One analyst upgraded the price target of RIM based on the assumption that the ongoing patent battle between Samsung and Apple will help RIM sales.  It’s hard for me to fully buy into this theory because the analyst does not consider some of the most important drivers in the mobile space.  RIM is no longer the only player in town when it comes to mobile devices geared towards the corporate world.  Regardless of whether or not certain Samsung devices are taken off of the market due to the patent law suit, RIM will not be the de-facto beneficiary of the gap in the market.  This particular analyst totally ignored the fact that Nokia plans to release Windows Mango based smart phones sometime in the fourth quarter of 2011.  Right now, if I had to bet on consumer preference of RIM v. Windows Mango, I think our friends in Redmond have the upper hand.   

Here’s my logic.  In terms of features and functions, the differentiation in smart phone devices is now very slim.  Picture/video quality, data storage, RAM, screen resolution, etc. are all relatively in the same ballpark.  Now, what matters most to the smart phone user is how fast and how smart they can access the data that is important to them.  On this factor alone, Google Android scores high, followed by Microsoft with their Bing search engine.  So while the differentiation in features between Android, Windows Mango, iOS and RIM devices is minimal, as location based search becomes a critical aspect to a user’s ability to access data and make that data more functional for their unique needs, Android and Windows Mango devices will take market share from Apple and RIM.  Apple and RIM have to use either Google’s search engine or Bing to meet the growing needs for user trends and location based services on their devices. 

Most user accepted location based services such as daily deals, travel deals, and networking services require a powerful search engine to properly analyze user trends on their device and push appropriate deals or services.  Android and Windows Mango are currently in the best position to power these services.  Apple and RIM will be in a tough spot with the growing competition from Android and soon to be released Windows Mango.  So while I may not be a Wall Street analyst, I would recommend you wait a bit before going all in and buying up RIM’s stock.

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