Serious doubts are being raised at the idea of rushing headlong into a technology that has serious implications for personal privacy and safety, particularly that of female users.
Location tracking: social advance or just plain intrusive?
Imagine having a three-dimensional map of Dubai or Abu Dhabi on your phone pinpointing all your favourite haunts, plus the real-time location of friends and acquaintances.
The technology to do all this and more is already under development and heading to a phone in your pocket. Global position system (GPS) chips are now common in smartphones, pinpointing the exact locations of users.
At the same time, serious doubts are being raised at the idea of rushing headlong into a technology that has serious implications for personal privacy and safety, particularly that of female users.
Google last month launched Google Place Search, a location-based service it describes as "a new kind of local search result that organises the world's information around places".
"We've clustered search results around specific locations so you can more easily make comparisons and decide where to go. Say you're looking for that great barbecue restaurant with live music," says Jackie Bavaro, a Google product manager.
In August, the social networking site Facebook also announced a location-based service, Places, which allows users to share their location with friends by checking in at a physical location, such as a store or restaurant, and checking the location of friends who have also checked in.
Big players such as Google and Facebook are, as is customary in technology, following in the footsteps of smaller and nimbler competitors. Foursquare is a location-based service that encourages users to check-in each time they visit a specific location, thus amassing points and sometimes qualifying for discounts from businesses they appear to frequent. Others on the network can also track their location.
But there are already growing concerns that users anxious to extend their social networking may not pay sufficient attention to who else may be on the network. Teenagers are already vulnerable to sexual predators with fake identities prowling on the internet. Location-based services are now set to take this threat to a new level. Even without bothering to use a fake identity, a predator could, for example, track the precise location of a girl going home alone.
"Social challenges, such as privacy … will remain major concerns for contextual service users through 2020," says Nick Jones, an analyst at the research company Gartner.
Gartner defines the new location-based and social networking services as "contextual" or "context enriched".
"We expect that the combination of context, mobility and social networking will be a rich source of innovative applications for enabling new 'communities of place' consisting of people with common interests in a similar location," says Mr Jones.
"Location is essentially about context, and context is becoming an integral part of internet service," says Eden Zoller, an analyst at Ovum.
"This is precisely why so many players are converging on location. There are also wider trends at work, notably the greater availability of flat-rate mobile data plans and GPS-enabled devices."
Ovum forecasts that the market for GPS devices will grow rapidly from an estimated 163.9 million shipments in 2007 to almost 572 million in 2012.
The industry is moving towards GPS-enabled smartphones that allow third parties to learn far more than they already know about mobile phone users.
"To be successful, contextual systems must deliver highly personalised, relevant information and services with minimum effort from the user," says Mr Jones. "Context will use better personal knowledge based on both deductions and information volunteered by the user. For example, knowledge of your wife's birthday would enable a context broker to remind you to buy flowers."
Analysts believe that personalised location-based services will have a massive impact, not only on the mobile phone market but also on retailers, restaurants and the entertainment industry.
"Consumer-facing organisations should establish context pilot projects to determine how context can be used to improve the quality of their customer interactions," says Mr Jones.
The industry believes that the presence of giants such as Facebook in the location-based services industry will act as a catalyst in the development of new services.
"Facebook's massive user base makes its new Places feature a potential key player for social networking location data and will force other location-based services to modify their value propositions," says Thilo Koslowski, another Gartner analyst.
But he says there are also growing concerns among consumers that social networking sites are already invading their privacy.
"Given Facebook's past privacy challenges, the success of Places will depend on the company assuring users that they will be able to manage the check-in process - especially as it relates to checking in or being checked in by other friends," says Mr Koslowski.
There is also the likelihood that the providers of location-based services will amass information from other sources to create more precise customer profiles.
"The increasing number and richness of information sources required to deliver sophisticated user experiences will demand that context brokers recognise and process a growing range of information from a wide range of new sensors and external information feeds," says Mr Koslowski.
"New information to feed brokers may become available as new sensors are introduced in devices such as mobile handsets. We also expect that owners of context brokers will want to analyse clues to user behaviour from other sources, such as customer relations management systems, social networking, e-commerce activity, payments and web search requests."
There is, however, a possibility that this level of knowledge could serve only to annoy mobile phone users, since there are already calls for some kind of service allowing consumers to redress incorrect information.
"Context providers will need to offer a service akin to credit-rating agencies for users to query and correct deductions made about their behaviour," says Mr Koslowski.
Location tracking of customers may be making retailers lick their lips in anticipation of a new hook with which to land new customers. But personal privacy and safety fears may result in some people switching off their smartphones or replacing them with a simpler model.