• by Mark Walsh  @markfwal, August 26, 2010

Mobile experts from Microsoft, Research in Motion and other companies Tuesday highlighted GPS and other location-based technologies as a key to boosting consumer engagement and marketing efforts on mobile devices.

But the executives gathered for a panel focused on mobile hardware at MediaPost's Mobile Summit in Lake Tahoe also acknowledged that adoption of some technologies like Near Field Communications and augmented reality is still a ways off.

Setting the stage for the discussion, ABI Research analyst Neil Strother noted that more than half of U.S. cell phones will be equipped with GPS tracking technology by next year -- up from 36% this year -- and more than a quarter of phones will become Wi-Fi-capable by next year. The growing availability of these features makes it easier for people to tap into location-based services providing nearby offers or product information.

Strother pointed to the much-publicized new shopkick app for the iPhone that detects a user's device when someone enters a participating store like Best Buy and immediately rewards them with points that can be redeemed for products.

He also mentioned PlaceCast, which creates what it calls "geo-fences" around shopping locations so when a subscriber enters that area, the network is activated and relevant offers can be sent to their cell phones via SMS.

"GPS and Wi-Fi and apps like shopkick are taking these capabilities into the real world," agreed Jeff Plaisted, national sales manager for mobile advertising at Microsoft. "You help people navigate around the aisles and offers come up." But he added that the challenge is still to get wide uptake of such applications across different platforms and devices.

Coupons.com is trying to solve that problem with its shopping-related apps for Android phones and the iPhone. The company recently announced that its Grocery iQ and Coupons.com apps have been downloaded more than 1 million times. Panelist and Coupons.com CTO Steve Horowitz demonstrated the Grocery iQ app, including voice recognition and barcode scanning, for creating and sharing grocery lists.

As a former leader of the engineering team that developed Android at Google, Horowitz emphasized that the platform's open-source technology has helped it spread quickly across multiple devices and carrier networks, unlike the iPhone. Android became the top-selling smartphone OS in the U.S. for the first time in the second quarter this year.

But just discovering location-based apps can still be a problem for consumers, according to Mike Kirkup, director of developer relations at BlackBerry-maker Research in Motion. RIM, which has badly lagged Apple and Google in the selection of apps offered, has recently taken steps to change that -- most notably by acquiring app store developer Cellmania.

Kirkup said that a BlackBerry app for a little-known museum managed to become one of the top downloads in its app storefront because museum staff were actively promoting it to visitors onsite. So the key is to directly promote from physical locations or tie them into existing loyalty programs to bolster adoption.

With the launch of its Windows Phone 7 mobile operating system at year's end, Microsoft's Plaisted said the company is counting on the "live tiles," or dynamic widgets, featured in the interface to appeal both to consumers and business users.

He added that the tile-based screen was also drawing keen interest from marketers in connection with its potential to help surface product or other information more easily than via a conventional mobile app.

The panelists were not optimistic about other much-discussed technologies like near field communications and augmented reality for mobile marketing. Horowitz was skeptical about the spread of NFC, which involves installing small chips into phones to enable contactless payments, because of the cost. He questioned whether carriers would be able to subsidize that effort with uncertainty about the consumer response.

And augmented reality, which allows mobile phone users to overlay physical world objects with digital information and imaging, was viewed as more of a novelty for the near future. ABI's Strother estimated that augmented reality would not gain traction for about five more years. But he also expects to see more experimentation with AR-based marketing in the coming year.