In 2000, the mobile industry's dream was, "You're passing a Starbucks, and your mobile phone pings with a coupon for 50 percent off a latte." In 2008, the reality will be, "You're lost, but your cell phone knows where you are -- and will get you outta there."

Location-based mobile services, or LBS -- mobile data applications that use information about your location derived from GPS, cell tower triangulation or your own input -- can provide a crucial link between emergency workers and people in trouble. They can also be a lot of fun, assisting in finding friends or simply navigating around town.

LBS may really take off in 2008, thanks to a new generation of GPS chips, according to ABI Research analyst Shailendra Pandey.

"One of the biggest hurdles for integrating GPS into handsets was that the chipset cost was very high," he said. Today, "prices have come down, and the manufacturers are also taking care of some of the technology issues like signal strength. Now, operators also seem to be more optimistic about the market for location based services."

While consumers happily embrace services that make life safer, easier and more fun, some privacy experts worry that proliferating GPS-enabled handsets will take us further down the path toward a totally monitored environment.

For instance, the consumer advocacy group Privacy Rights Clearinghouse has warned that consumers should only subscribe to services that offer maximum user control. It also said location-based functions should be opt-in, rather than opt-out, to avoid abuse.

That concern isn't new. In 2000, the wireless industry association CTIA petitioned the Federal Trade Commission to codify rules of notice and consent for using location information.

The association suggested LBS providers should be required to inform consumers about their data collection and use practices before they can use or disclosing their information, allowing consumers to choose whether to participate.

In 2002, the FCC declined to issue rules, saying existing laws were enough. Evidently, however, recent events suggest that further scrutiny might be needed.

Last month, the Washington Post reported that law enforcement officials routinely get court orders requiring mobile network operators to help track suspects. They used to do this by regularly pinging suspects' cell phones; the job has been made even easier with the arrival of GPS in phones.

While this practice could save a life -- for example, helping to locate a kidnapping victim -- some judges don't require law enforcement to show probable cause that a crime is being committed.

According to the Post, one judge reasoned that since a suspect was voluntarily carrying a tracking device, no warrant was necessary.

In August, a New York City employee was fired from his job after the GPS on his city-provided phone showed that he'd been at home before his shift ended on 83 occasions, according to the New York Post.

The judge in that case, according to the report, said an employer "is not expected to notify its employees of all the methods it may possibly use to uncover their misconduct."

Similarly, LBS service provider TeleNav offers TeleNavTrack, a tool promising to employers that they can, according to the company, "See where your workers are and what they're doing."

The service from TeleNav, which claims 14 carrier partners, is only operable when an employee is clocked in. But the company advises employers to inform staff upfront about the service.

"There are more benefits [for employees] at the end of the day," TeleNav co-founder Sal Dhanani told InternetNews.com.. "They don't have to go back to the yard to clock out, and they get navigation help when they need it."

Google found itself in a privacy flap in November with its Maps for Mobile service, which lets users search for businesses nearby and get directions without keying in their address.

This article was first published on InternetNews.com. To read the full article, click here.