Skyhook Wireless breaks into the big time with Sirf deal: Skyhook has a constantly updated database of coordinate-tied Wi-Fi signals that allow it to produce a GPS-like set of results based on a scan of the vicinity from a laptop or handheld. Sirf supplies GPS chips to most of the location-enabled devices--from TomTom, Garmin, Magellan, to name a few--and cell phones in the world. Sirf will integrate Skyhook's system so that mobile devices that use GPS and have Wi-Fi radios can add those results to the mix.

Skyhook's Wireless Position System (WPS--yes, another technology called WPS) will be available as an integrated option to carriers that want to provide location-based services like directions and nearest-business services to phone handset and handheld users.

Skyhook chief Ted Morgan said in an interview that this deal provides full legitimacy to their technology approach. "It's the leading GPS chip company saying yes, there are important areas where GPS doens't work great, and Skyhook is the answer to it," he said.

"It's taken a couple of years for us to win over the GPS world. They've got 15 to 20 years of experience building this system, and to come along with an entirely new model is always treated with some level of suspicion," he noted.

The deal rises on the fact that dual-radio GSM and Wi-Fi phones are already common and likely to become more so. "We think the market for Wi-Fi hybrid cell phones is going to be fairly healthy," Morgan said, citing the "dozen phones" in the work for BT, which has rolled out a converged calling service, and T-Mobile's US entry into the converged market.

Morgan said that Skyhook remains a complement to satellite-based location placement, but that WPS can overcome some of the irritants that today's user of devices with GPS have to deal with. Specifically, Morgan said, GPS devices require as long as a couple of minutes when initially fired up to obtain good satellite fixes.

Skyhook's system requires a few seconds. Skyhook doesn't associate with access points, making signals far too weak to be used for a network connection still viable data points that correspond to its database of 15 million APs. "If you just want to look for where the nearest ATM machine is, you're not going to stare at your phone for two minutes," Morgan said.

The Skyhook system can assist GPS receivers, too, even by providing a general geographical location, which, in turn, allows the GPS receiver to have the right idea about which GPS satellites can be received and where they are located in the sky. Cell phone networks offer a similar sort of assisted GPS using cell-tower locations, but Morgan said that assistance typically works only on the cell operator's home network, where the Wi-Fi option would work anywhere Skyhook has coverage.

Morgan explained that GPS systems can be optimized to take a variety of information to produce better results, and that this works especially well when entirely different technology is employed. Sirf's system will be able to integrate WPS coordinates with GPS coordinates for better accuracy and more quickly than GPS alone.

The company covers about 70 percent of the US population using 200 full-time route drivers. The firm is expanding coverage into Europe and is "working on Asia." Morgan said, "We're going to expand the coverage according to those deals."

Skyhook's software provides a loop back to the firm's servers, so that scans of access points in the vicinity of a device are added to the database of locations. With GPS and WPS in one system, and with the potential of tens of millions of mobile devices deployed, Skyhook could obtain a vast amount of new information that further improves the accuracy and extent of their coverage.

Equipment with GPS and WPS will take a little time to reach market. "You won't see the major device makers until '08," Morgan said, but Wi-Fi-only phones could have the technology as early as the second half of 2007.