Hype about new technologies regularly outpaces companies’ ability to deliver. This is not only true on the internet, where trends such as “twittering” have yet to translate into sustainable businesses. It is also true of phones, where handset makers, software companies and mobile operators are all rushing to capitalise on interest in so-called location-based services.

Boosters have been talking for years about the potential for mapping services that allow users of mobile devices to share information about their location. Yet early attempts to capitalise – such as showing ads on satnav devices – never gained much traction. But now such devices are going mainstream: global positioning technology comes standard with Apple’s latest iPhone. Gartner, the market researchers, estimate that 29 per cent of all new handsets will include built-in GPS this year.

The opportunity, though, goes beyond mere maps on phones. Imagine a service in which shopkeepers paid to show their advertisements to nearby mobile phone users – much like advertisers already pay to reach web-surfers entering keywords into Google’s search engine. The potential is huge.

Google, as usual, is gunning for the lead. Having indexed the world wide web, the internet search group hopes to do the same in the real world. Its Android mobile operating system, now available on phones in 22 countries, provides the way in. But Google faces competition, not least from Nokia, the world’s biggest mobile phone maker. In 2007 the Finnish group paid $8bn for Navteq, a maker of electronic maps. More recently, it bought Dopplr, a London-based start-up that allows travellers to share information about upcoming trips and hopes to develop the world’s foremost index of location data. Google, in spite of its clout, has its work cut out.

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