May start services within this year: report
Chinese search giant Baidu Inc has signed an agreement with telecom equipment maker Huawei Technologies Co to jointly develop indoor navigation services, Baidu confirmed with the Global Times on Tuesday.
No details on the cooperation were provided by Baidu on Tuesday and Huawei was not available for comment. But news portal it.sohu.com reported Monday that the two companies will work together in product development, marketing the new indoor navigation technology and also exploring new business models.
The two firms may start to offer such services in places like airports within this year, the report said, citing Wang Tao, president of Huawei's wireless network unit.
Baidu has already shown its interest in indoor positioning technologies before.
In September 2014, Baidu invested $10 million in Finnish start-up IndoorAtlas, a post on Atlas' website showed. With the investment, Baidu gets exclusive access to IndoorAtlas' indoor positioning technology in China, media reports said.
Indoor navigation is designed to help people find their way through dense indoor spaces, such as a multi-floor shopping mall, where GPS signals cannot reach. The rapid development of the 3G and 4G mobile networks and the wide coverage of Wi-Fi services have made indoor navigation feasible, said Xiang Ligang, a telecom expert and CEO of industry information portal cctime.com.
Analysts said that the indoor navigation sector is still in its nascent stage both domestically and internationally, and cooperation between the two companies will push forward establishment of the industry standard.
"It [the cooperation between Baidu and Huawei] is a strong alliance," Xiang told the Global Times on Tuesday, as Huawei has strong wireless communications technology and Baidu is an experienced Internet mapping services provider.
"Shopping malls will be the most possible scenario for indoor navigation," Zhang Xu, an industry analyst at Beijing-based consultancy Analysys International, told the Global Times on Tuesday.
But he noted that indoor navigation needs more precise location technology, which is currently a major obstacle for the sector's development.
Indoor navigation services not only help users by showing them the way to places, it can also help stores to send out discount or promotion information to nearby customers, which may be a way for indoor navigation providers to generate revenue, analysts said.
Baidu is not the only company that is eyeing the sector. On January 18, AutoNavi Holdings, which is backed by Internet giant Alibaba Group, also launched its indoor navigation services, which could lead its users to stores, restrooms or ATM machines, media reports said.
An app designed by Beijing-based technology firm RTMAP also provides similar services. The company has secured two rounds of venture capital investment at present and is cooperating with around 500 shopping malls at present.
Besides its large user base, another advantage for Baidu is that its online payment services could be used in its cooperation with stores, Zhang noted, as people could make purchases using the company's payment platform after they are directed to a store.
Baidu told the Global Times Tuesday that its mapping services now has around 400 million active users each month and accounts for around 70 percent market share in the online mapping sector.
In off-line smartphone navigation, Baidu accounted for an 8.3 percent market share in the third quarter of 2014, after AutoNavi with 43.9 percent and Careland with 25.5 percent, according to data from Analysys International released in December.
"It will still take a long time before the indoor navigation technology matures and generates revenue for mapping companies," Xiang from cctime.com noted.