Mobile LBS Sales to Reach $13.3B '13

April 3, 2008

After years of hype, mobile Location Based Services (LBS) are finally gaining traction among wireless subscribers. This growth is driven on the supply side by WCDMA and GSM handsets increasingly joining the many CDMA-based devices that incorporate GPS capabilities; and on the demand side by surging consumer interest in personal navigation functionality. LBS revenue is forecast to reach an annual global total of $13.3 billion by 2013, up from an estimated $515 million during 2007.

Personal navigation, although expected to remain the most popular consumer application over the next several years, won’t be alone: friend-finder, local information searches, family tracker applications, and enterprise applications (including workforce tracking and fleet management), will all find niches under the LBS umbrella. Friend-finding is anticipated to be the next service launched for mass consumption.

ABI Research industry analyst Jamie Moss says, “Personal navigation and enterprise services are projected to be the highest revenue-generating services of the five LBS categories profiled, and are forecast to be worth about $4.3 billion and $6.5 billion respectively, per annum, by 2013.”

“The interesting thing about the LBS content-producing sector is that much of the information is already available,“ Moss continues. “It’s a win-win situation for content providers: they already have established markets for their map and POI data (automotive and telematics), and LBS is yet another that could potentially provide them with considerable additional licensing revenue.”

However there are still important service-related developments needed to ensure LBS’s future success. The wider availability of all-inclusive data tariffs will spur service usage, which will in turn reduce users’ concerns about how much data value-added services like LBS might consume.

Perhaps the most important development will be the cross-network interoperability of services. Once services provided by one carrier are capable of seamlessly incorporating users from other networks, then the usage of LBS will be driven virally by the desire to respond to and interact with friends and family on other networks.