Getting a Fix on GPS

(Business 2.0 Magazine) -- Location-based services will soon become a lot more precise - and profitable. The European Union is preparing to launch its $4 billion answer to GPS: a satellite navigation service called Galileo that will be fully operational in 2010.

Rather than creating a rival system, Galileo will increase the number of satellites emitting signals to GPS receivers around the world, from 24 to 51. Today satellite readings from the global positioning system, the U.S. military-controlled geostationary satellites used for most location-based electronics, aren't good enough to pick out, say, a single car on a city street where tall buildings can block satellite signals.

Since all location devices eventually are expected to work with its satellites, Galileo will make GPS vastly more reliable.

Meanwhile, the Pentagon plans to retrofit its aging 28-year-old system by 2021, and Russia is modernizing its Glonass satellite system, which fell into disrepair after the Cold War. With Japan developing a smaller navigation service, all GPS devices a decade from now could be receiving signals from as many as 100 satellites - rendering today's navigation gadgets obsolete but creating vast opportunities for locational services.

"There's so much information you can feed people based on where they're located," says Frank Viquez, a director at ABI Research, which estimates that the global market for location-based services will double to $42 billion by 2010.

Galileo's arrival already has companies on both sides of the Atlantic jockeying for position. Trimble Navigation, a Sunnyvale, Calif., developer of GPS technology used by large corporations, is working on an antenna that will pick up signals from Galileo (and Glonass too). French startup Vu Log is launching an electric-car rental service that, with Galileo's help, will let people find the nearest Vu Log car with a cell phone, open it with a smartcard, drive across town, and leave it parked for the next customer.

Now that's precision.