Communications and Technology Industry Research

During 2007, North America generated 81 percent of the world’s Location Based Services (LBS) revenue. In 2013, that percentage will be just 32 percent. In the same period, Western and Eastern Europe’s combined LBS revenues will jump from just 5 percent to 31 percent. The Asia-Pacific region, meanwhile, will see a rise from a 2007 share of 11 percent to 27 percent.

 

“Location based services are not a zero-sum game,” says ABI Research (News - Alert) analyst Dominique Bonte. “It’s not that Americans will lose enthusiasm for LBS. These changing shares of global LBS revenue just reflect the fact that a market, which for technical reasons has been largely restricted to North America, will finally grow strongly in other world regions.”

 

LBS’s slow uptake outside North America has had everything to do with the fact that CDMA phones have utilized GPS to comply with the United States’ E911 regulatory mandate. The GSM handsets owned by most users in Europe and Asia have not generally offered native GPS support. However with the broader proliferation of GPS-enabled GSM handsets in those other regions, and with the quickening rollout of 3G services worldwide, the opportunities for LBS service offerings are set to grow.

 

That’s not to say that the same applications will be adopted at the same rate everywhere, or that LBS revenues will be uniform.

 

“Since most LBS application developers sell to the world, and most of their products are platform-agnostic, the cost per service for users is likely to be similar in all regions,” says Bonte. “However, a navigation service can cost as much as $9.99/month, whereas friend-finder services might only be $2.99. On that basis, as well as via cultural preferences, particular services will be popular to differing degrees in different regions. That can affect the total revenue generated in a particular region.”