Nakao, Trussel and Foreman at Tuesday's panel on location-based services.

I had the privilege on Tuesday night of moderating the Northwest Entrepreneur Network's monthly Think Tank panel, which happened to be on the hot topic of location-based services. (Given the packed house, everyone seemed to locate the venue just fine at Seattle University). Our panelists -- including Kevin Nakao of WhitePages, Kevin Foreman of Point Inside and Bryan Trussel of Glympse -- covered a lot of ground during the 75 minute chat. They discussed everything from the battery life of phones to mobile advertising rates to some of the potential privacy concerns around location-based services.

When I kicked off the event by asking the audience how many people owned a GPS-enabled phone, nearly every hand went up. Granted, this was a geeky crowd. But Trussel of Glympse said that three years ago, probably only 10 percent of the crowd would have raised their hands.

"The real innovation and the real excitement is this new ability -- that is really only a couple years old -- of being able to use your phone to dynamically know your location," said Trussel, whose company has developed an app that allows the user to share his or her location on a mobile map.

Foreman noted that the category is exploding, with an estimated 6,000 location-based applications now available in Apple's App Store. Four years ago, the former general manager of the mobile business unit at RealNetworks, said there were really only five location-based apps on the market, and they all cost something like $9 per month.

Nakao, vice president of monetization and mobile at WhitePages, brought up the key topic of how companies can make money with location-based services. He seemed pretty bullish on mobile advertising, noting that "location pays." To that point, Nakao said that WhitePages is making an effective CPM of $15 to $30 from local advertising.

Foreman

Foreman, whose company recently rolled out a new mobile advertising service for retailers at shopping malls, also thinks that local advertisers will shift more of their spend to permission-based advertising and coupons delivered to mobile devices. Foreman said he'd be amazed if the physical Yellow Pages exists in five years, and noted trouble for printed newspapers as well.

"Delivering coupons ... on a dead tree at 4 o'clock in my driveway is not an effective way to reach people," said Foreman, adding that he doesn't see many people walking through the mall with newspaper ads from Macy's. "We are going to have a lot of hiccups. There are about 67 mobile coupon companies today ... and probably 64 of them will go bankrupt."

While I tried to ask the penetrating questions, it was the panel's interactions with one of the audience members which I felt illuminated just how much the wireless world has changed in the past few years.

Nakao, who previously worked at AT&T Wireless, incited the discussion when he said that one of the "biggest barriers" to innovation in the U.S. are the wireless carriers.

Foreman followed that up by bluntly noting: "You don't need carriers anymore. You used to for location-based services, but now with the iPhone and Android you don't need the carrier to get your application out there."

That prompted an audience member -- who worked at a wireless carrier -- to say that the carriers have been portrayed as "the evil spirit" for some time.

Nakao

Nakao kept hammering home his point, saying that mobile application developers "should run from the carrier deals" and go to the open marketplaces forming around Android, RIM and the iPhone. "You will invest way too much time and resources trying to meet their RFP ... and in two months you could build your own application and get it launched," he said. "The rev share is going to be the same, there really is no benefit."

Nakao added that WhitePages has about a 10 percent penetration rate on its iPhone, BlackBerry and Android applications, which he said is similar to the adoption rates one could achieve with the carriers.

Trussel tried to take on the role of Switzerland during the back-and-forth, noting that the slow response rates of the carriers and their ability to squeeze out profits from vendors was one of the reasons he swore that he'd never get into the mobile business. But he thinks things are changing for the better.

"Frankly, the carriers are more open now than they ever have been," he said. "I don't know if it is because they saw the light or the iPhone scared the Be-Jesus out of them and they know they have to innovate. It doesn't matter. They are moving faster now than they did before, and I think you can now have a relationship with a carrier that might benefit your company. Just don't bet your company's entire survival on having that deal."

Nakao stood firm with his anti-carrier sentiment. "I can launch an Android application in two weeks," he said.

To which the audience member replied that carriers also can now operate that fast. But Nakao wasn't buying that argument. "I'll spend two weeks setting up a meeting with you guys," he said.

It was an entertaining debate, and highlighted for me how much things have changed in the wireless business. Remember when it was every developer's goal to get their application placed on the "carrier deck?" Things have changed.

But it is not like the new platforms -- iPhone, Android, RIM and Windows Mobile -- are without their problems. Nakao rattled off issues with each, noting the tough approval process at Apple, the lack of a robust billing on Android and the lack of a true application marketplace for RIM.

And Microsoft's Windows Mobile?

"I am taking a wait and see approach," he said. Later, however, Nakao came back to the topic and cited the recent TED video in which Microsoft showcased some of the augmented reality efforts now underway with Bing Maps.

"The stuff Bing is doing, that will save Windows Mobile," he said.

Trussel echoed some of those challenges as well, but also pointed out the challenges with Apple's iPhone of not allowing multiple applications to run at the same time. With regard to RIM, Trussel said that it can be tough to develop apps for multiple pieces of hardware.

While there have been fits and starts to location-based services, the panelists agreed that the market is here to stay. In response to a TechFlash reader who asked whether consumers really want location-based services, Trussel had this to say: "You should remember this point in time when you actually thought that was a question. I think, in four years, it will be as strange of a question as if you said: 'Did you ever really need to search the Internet to find stuff?"

Further Reading: Mark Briggs also has a write-up of the event on Lost Remote.