two years sending vehicles equipped with Wi-Fi scanners down every street and byway of 2,500 U.S. cities, logging the locations of 23 million access points. Cell phones or other wireless devices loaded with Skyhook’s mobile client software (which is part of this week’s iPhone upgrade) get their bearings by zapping the local Wi-Fi IDs to a Skyhook location server, which does a quick calculation and sends its best guess at a latitude and longitude back to the device, which can then display it on a map.
On the iPhone, which relies on AT&T’s Edge data network, the whole transaction takes a second or two. Really. I’ve tried it myself at various points around Boston. (It’s pretty accurate, too: at the corner of Charles Street and Revere Street on Beacon Hill, it nailed my location exactly. From my apartment in the South End, it’s about half a block off.)
Skyhook, which has raised $17 million in angel funding and venture capital from RRE Ventures, Bain Capital, Intel Capital, and CommonAngels, has already put its system on devices like the iRiver portable media player from Reigncom. It has also partnered with traditionally GPS-focused companies like Navteq to add Wi-Fi-based positioning to their map databases and navigation software. But the deal with Apple is unquestionably Skyhook’s biggest business breakthrough to date.
“They’ve been fantastic to work with,” says Morgan. “They are the kind of company that can add value and help you make a better product, and they’ve obviously been very supportive.” Morgan hopes the Apple deal will raise Skyhook’s profile with other makers of cell phones, music players, portable gaming platforms, laptops—basically any gadget with a Wi-Fi connection. Once they’re carrying Skyhook’s software, these devices can employ location information in a number of ways, from helping with mapping and driving directions (the only application so far on the iPhone) to enabling local business searches, friend-finding, and location-based games.
While access-point locations are a resource that anyone can exploit, Morgan says he isn’t too worried about competitors coming along behind Skyhook. “It’s taken us years to build out the [location] database, and anyone who wants to replicate that will have to put in the same time and effort,” he says. “The science behind it also fairly hard, and we’ve filed 25 patents around the core positioning algorithms. We expect folks like Google [which is developing its own cell-phone operating system, Android] to try and replicate it over time—but they’re going to have an uphill battle.”
