Although the market is well off its lows, it continues to be volatile. With bailouts, mergers, acquisitions, and looming bankruptcies, individual investors and institutions alike are in fight or flight mode.
Couple this with the combination of decreased consumer spending and a tightened business credit market and we have thousands of companies fighting for the same dollar. A growing number of emerging technology providers are finding it harder than ever to bring their offerings to the masses.
As the economy continues to slump, many companies with innovative products and technologies are increasingly leveraging strategic relationships to help bring them into the limelight. Whether it be Pandora aligning itself with Internet Networking sites or positioning itself as an iPhone application, what was once a cutting edge music for Internet savvy teenagers is now familiar to the mainstream market.
By pursuing alliances with more established partners that possess a vast pool of resources and a strong reach into their key target markets, tech developers can bring their products to market in record time and generate capital while doing so.
Connecting People with Technology
A perfect example of this is the strategy currently being employed by small-cap Location BasedTechnologies Inc. (OTCBB: LBAS).
The emerging developer of GPS-enabled personal location devices realized that bringing its PocketFinder hardware into the mainstream would likely take years of effort and cost millions of dollars, if efforts were ever even successful. However, management also recognized a great opportunity when they saw it and began pursing relationships with smartphone providers.
By providing the application software used in PocketFinder devices to the millions of consumers worldwide currently using the Apple iPhone and and T-Mobile Google Android phone, LBAS is now able to gain instant recognition for its offering while making money rather than spending it.
With more than 7 million combined users in more than 50 countries, these two opportunities bring the PocketFinder offering exposure that would have been otherwise impossible to gain had the company stuck with the box slinger mentality that typically plagues so many failing hardware providers today.
Tapping into the Smartphone Revolution
The smartphone revolution is rapidly changing the way that we access information.
Currently, 7+ million iPhone users now access more than 10,000 software applications to help accomplish tasks as diverse as finding the cheapest gas station and reading the daily newspaper. The device is becoming so popular in fact that Gartner recently reported that iPhone sales have exceeded sales of Microsoft Windows Mobile devices worldwide for the first time ever.
In addition, the T-Mobile smartphone running Google’s Android system is also fairing extremely well despite the ongoing economic slowdown with its manufacturer recently increasing its 2008 sales forecast to 1 million units from 600,000.
iPhone App Sales to Surpass $500 billion
In a testament to the popularity of smartphone applications, Apple CEO Steve Jobs recently stated in a Wall Street Journal article that the market for iPhone apps will soon pass $500 million in sales and could someday reach $1billion.
By making its services available to the rapidly growing global smartphone user population, LBAS has exponentially widened its target market and placed its offering in front of millions of potential customers that were previously unreachable given the company’s limited resources. Strategic alignment with Apple and Google provides the best of both worlds for LBAS.
The company can generate sales immediately for its PocketFinder application without selling or shipping a single piece of hardware.In addition, each time a smartphone user downloads a version of their software, a new potential user of its location devices is born.
Rather than focussing solely on hardware sales, which may be a tough proposition in today’s economy given the fact that there is already a massive installed base of more than 175 GPS-enabled handsets, LBAS is able to tap into a massive marketplace right now while positioning itself for the future. Now, that’s what I call forward thinking.
Capitalizing on 2 Red Hot Trends
With a business strategy designed to capitalize on the surge in consumer adoption of both smartphone devices and real-time location tracking solutions, LBAS has positioned itself for significant growth going forward.
Moreover, alignment with technology leaders possessing the resources necessary to optimally bring their PocketFinder product to market has opened doors for the company that may have never been opened had it not decided to ‘think outside the box’ for growth strategies.
As mentioned in previous editions, the opportunity for location-based software applications in the mobile space is expected to be nothing but tremendous over the next few years. Subscribers to location-based communications systems on mobile devices are pegged to grow from 16 million in 2007 to 300 million by 2011 when the market is worth nearly $8B. (Gartner data).
Net-Net
By riding this wave of growth, LBAS should be able to generate solid near-term revenues through sales of services to mobile device users, while leveraging the wealth of resources possessed by global leaders such as Apple and Google to position its hardware offering for future growth.
We expect good things from Location Based Technologies Inc. (OTCBB: LBAS) in the future as the company pushes forward with plans for growth in two key markets that are currently exhibiting their resilience to the troubled economic environment.
With its PocketFinder services now available to smartphone users worldwide, a $3.7 million purchase order in hand, and manufacturing and distribution relationships in place for its hardware offering, 2009 is shaping up to be a break out year for LBAS. Check back soon for updated coverage on the company and the progress of its key PocketFinder offering.
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