More on the iPhone: Boon or Bust for Mobile Local Search?

The blogosphere is abuzz over the iPhone. Lots of claims that it will be a game changer in mobile search and entertainment. Apple certainly sees the potential of the device, and correctly anticipated the killer app of mobile devices by baking in Google and Yahoo! online services (mail, maps, search, etc.)

Mobile local search has been prophesized by us and many others over the past 18 months to soon take over this killer app status. I still believe this to be true, but a few things have held it back so far:

1. The absence of a compelling device that isn’t cumbersome and doesn’t offer a vastly inferior search experience and user interface than what we are used to (PC-based search). Here, a sizable challenge has existed in the paradox that users want more functionality but on smaller and smaller devices.

2. The demand is not there yet. This could be a result of the previous point, or it could simply be that far fewer consumers than anticipated by marketers and mobile technology providers are actually interested in watching television and searching the Web on their mobile devices.

Despite all this, as we’ve said in the past, mobile local search applications (and search in general) must have simple utility. Far more important than novelty and whiz-bang features (though these things are good for generating buzz and hooking a small subset of early adopters), if a device can’t perform the simple functions that it’s supposed to (i.e., find the closest Starbucks), users will quickly lose interest.

As MapQuest VP and GM Jim Greiner stated at TKG’s recent Interactive Local Media conference, mobile search not only requires new platforms that are built for the form factor (small phone and keypad), but also a whole new way of thinking about search. In other words, search applications must return four results instead of 20  and those four must be filtered or prioritized in a way that take into account the anticipated proclivities of a user who is mobile (as opposed to sitting in front of her PC). Ad targeting and distribution must, of course, also take these factors to heart.

These things all go beyond Apple’s place in the value chain, but must be hammered out before mobile local search demand reaches mainstream levels. It will also be interesting to see if the traditional challenge for third-party application developers to get “on the carrier deck” (a function of wireless carriers’ exertive control and overactive filter for the apps that go on their phones) will exist with the iPhone. In other words, will Cingular throw its weight around or will Apple’s well-known embrace of third-party application development (for the iPod, for example) win out in encouraging innovation of mobile local search and other useful apps.

Beyond all these details lies the broader question, Will the iphone be a game changer for mobile search applications? Not to take the cop-out “time will tell,” but in this case I think the iPhone presents us with an interesting experiment: Now that there is a compelling device that alleviates some of the traditional hardware restrictions of mobile devices (for now we’ll assume this is the case), we can get a glimpse of the true demand for mobile search and entertainment.

This will get us closer to answering the question (#2) above: Is there really a considerable demand out there for consumers to watch episodes of “Lost” and search for the closest latte on their phones?