They sure as hell made it a lot easier. I was involved in a location based start up in about 2000. I was laid off in 2003, and they kept going until this year when they merged with Xora.
The most striking difference between modern location based startups and ours is how easy it is to get your application on a phone these days. I don't care how draconian Apple seems to be with getting your app on the phone, it just doesn't compare.
The company worked for months (if not years) to get the app distributed with a phone automatically (or nearly automatically), and the best we could get was that the enterprise sales group at the carrier could sell the solution to a company. You could still get our app on a phone w/o that, but it required a whole bunch of proprietary tools (that nobody would know how to get) and a serious amount of technical know-how at that. In other words, there was zero chance of someone saying, "hey, why don't we try this out for free to see if it can be of any use to us"
Perhaps this is why I don't get all in a tizzy about Apple's draconian app store practices (though, the last bits finally did get to me). I'm like a transplant from Czarist Russia who has come to post Patriot Act America.
Sure, location-detection portable devices have been out for a long time, but not until the iPhone did it actually take off.