Is There a Market for Location-Based Services?

Lately, more has been written about the market potential for location-based services (LBS). A new report by Swedish market research firm Berg Insight predicts the European market for LBS will grow by 153 percent this year to reach €274m (approx. US$300m).

Berg Insight analyst, Johan Fagerberg, attribues the market finally starting to show signs of growth due to "increasingly user friendly handsets paired with a more mature approach to content services [to] create the right conditions for launching new offerings on the market."

Fagerberg cites recently introduced navigation services from network operators Vodafone and Teliasonera as attractive new LBS that turn users "mobile phones into GPS navigators." These mobile services feature "dynamic map information that is downloaded directly from the wireless network" enabling "users to view anything from the latest traffic updates to hotels and restaurants on the handset display."

Last month on this side of the pond, ABI Research issued a report that found mobile carriers were beginning to push LBS here in the States. While the U.S. has trailed Asia and Europe, ABI predicts the market is gaining traction quickly with "Sprint recently introducing an operator-assisted direction-finding service, and other operators set to join the LBS bandwagon in the near future."

Analyst Kenneth Hyers commnetd, "As we forecast last year, GPS — an essential element for LBS — is starting to be included in GSM and WCDMA handsets as well as CDMA. Location-based services will proliferate along with a variety of other services. Gaming, 411, SMS, MMS, photography — will all be bolstered and powered by LBS."

It'll be interesting to see what types of content and services are introduced to the market by the network operators and vendors and whether privacy will be an issue. Some location-based services such as combining navigation with discovery and e-commerce capabilities might sound pie-in-the-sky , but is probably already in the works.

For example, imagine the convenience of locating the nearest Starbucks, finding and paying for a parking spot close by and then ordering and paying for a venti soy latte all from you cell phone or mobile device. Sounds cool......

via Digital Media Europe
via ABI Research