Skyhook Wireless will combine information from Wi-Fi wardriving, GPS radios, and cell tower signals for better location: The pitch at Skyhook Wireless is that despite its accuracy, satellite-based GPS remains relatively expensive, that it's slow to get a fix when it powers up, and that it's not accurate enough in the middle of cities. Their XPS 2.0 system leverages GPS with the advantages of Skyhook's Wi-Fi signal database and algorithms along with cell-tower triangulation.

Ted Morgan, the head of Skyhook, explained in an interview that while GPS is certainly the gold standard, and while it works well in stand-alone devices designed for continuous use and navigation, it's not the right choice by itself for mobile devices. It can take 5 or 10 minutes for a GPS-only device to get an accurate fix on the satellites it needs to give you accurate information. (Various shortcuts can provide less accurate information more quickly.)

"This notion of 'tell a user or consumer to stand outside for 30 seconds before they can search for the nearest pharmacy' is pretty silly," Morgan said. He noted that with all the radios now found in newer mobile devices, using several of them produces a fast and much more accurate result. The iPhone 3G, for instance, sports quad-band 2G, tri-band 3G, Bluetooth, Wi-Fi, and GPS chips.

Morgan said that A-GPS (assisted GPS) already combines cell tower information with GPS. A cell phone can be told approximately where it is, and thus instead of cycling through 24 satellites, start with the two that are most directly overhead. This can reduce the time to gain a location to as little as 20 seconds, Morgan said, although any kind of movement usually lengthens the time to 30 to 60 seconds.

Skyhook's system takes advantage of this aspect of A-GPS. They let a GPS system grab onto two satellites quickly to correct data from their Wi-Fi Position System (WPS). Morgan said that this reduces the WPS error by 35 to 40 percent through "weak fixes."

Within cities' concrete canyons, "you can only get a true GPS fix about 70 percent of the time outdoor, but you get two satellites all the time," Morgan said. "In the entire footprint, we're able to use this hybrid technology, even though GPS is only available 70 percent of the time." Outside of metro areas, cell towers can still be used to improve GPS startup times.

Skyhook has continued to expand its European coverage for WPS; they cover about 8,000 cities in the US and Canada, which is roughly 70 percent of the population; "it looks exactly like a cellular coverage map," Morgan said, and includes "any town with five streets in it."

In Europe, their current big push, partly because of their inclusion in the iPhone, they cover 70 percent of population in the current countries--the UK, France, and Germany--but they're now at 50 percent of the population of the rest of Western Europe. They're working assiduously in Japan, Korea, Hong Kong, and Australia as well, and looking into China and India. India has very little Wi-Fi, so they may rely more on cell towers there.

The company also announced a partnership with wireless chip maker CSR today, which is a major providers of Wi-Fi and Bluetooth chips to computer and handset makers. Nearly a year and a half ago, Skyhook partnered with SiRF, the dominant worldwide chip supplier for stand-alone GPS gear, that's also making a push into mobile devices. Skyhook obviously needs a win with a cell chip maker, like Infineon, Broadcom, or Qualcomm, given the XPS technology, to score a place in tens of millions of cell phones beyond the iPhone.

Skyhook's technology most recently appeared in a soon-to-ship model of the Eye-Fi--the Explore. The $130 Secure Digital card with Wi-Fi built in allows you to take pictures with any camera, and have the Wi-Fi signal space recorded for later lookup when you upload photos. The pictures are geotagged with that information. The card can be used with Wayport's 10,000 strong Wi-Fi network in the U.S for free in the first year, and $20 per year thereafter. David Pogue of The New York Times recently wrote up the Eye-Fi Explore.