What’s up with Location-Based Services?


It’s been long time since I wrote about ‘Location-Based Services’ on my blog. Thinking this, I was curious to understand the status of LBS in current scenario. This post will answer few curious questions that directed the flow of my endeavor to satisfy my curiosity. So without wasting anytime let’s see if LBS buzz has lived up to it’s expectations in this dynamic wireless era.

What is the status of the overall global LBS industry?

According to a recent study by Gartner Inc., The worldwide users of Location-Based Services are set to double to 95.7 million in 2009, up from 41 million a year ago, which should result in over $2 billion in revenue. “The LBS industry has matured rapidly in recent months through a mixture of consolidation, improved price/performance of the enabling technologies and compelling location applications,” said Annette Zimmermann, senior research analyst at Gartner.

Is there any demand for the LBS based apps? And what are the opportunities for advertisers and carriers?

Recently Compete launched a Smartphone Intelligence report that highlights few findings related to the above mentioned questions. 1 in 3 smartphone owners currently use a Location-Based Service at least once a month. In addition to this, 20% smartphone users expressed possible interest in using LBS if they knew more about what was available and how to use them. The below mentioned char shows some specific types of LBS apps that are being used now:

Picture 12

As we can see, weather & navigation based apps are a hit with the current LBS users. It also turns out that consumers are interested in getting local alerts and special offers or promotions from nearby stores or other retailers. This  interest in ‘local alerts & special offers’ present a wonderful opportunity for advertisers to reap the rewards by serving  these users with relevant ad content that will most likely see higher clickthrough rates! Surely looks like a valuable tool for the advertising networks!

Is greater interest in local  services like alerts,  ATM, restaurant reviews, special offers etc. a consequence of recession? Surely looks like that to me, with increased number of household with tight pockets, greater interest in “Local”  does not surprise me. People are surely limiting city-to-city travel and have started exploring more options available in their own city. Isn’t it? As more and more people venture out in their own city, they become more likely to use LBS to explore local restaurants, events, store locations, etc.

The report also states that, LBS services are also important to mobile carriers. It is because smartphone owners who use LBS are more likely to spend more money each month on their total wireless bill.

Picture 13

Also, 24% of Smartphone users have spent anywhere from $10-$50 for a single application, while 28% have spent between $5-10 on a single app. So LBS definitely looks like a gold mine for advertising networks, service providers and the mobile carriers! Only thing to look is the way revenue is shared by these parties in the future.

Talking about future, what does the future for LBS look like?

As it is very apparent that greater availability of GPS phones, reduced prices, and flourishing app stores arena have all contributed to the rapid growth of location tools. Gartner, Inc. also predicts that free Location-Based Services will gain further traction, with 40% to 50% of all users in North America and Western Europe using these tools in the next four years.

Apple’s App Store has proven itself a hot commodity. It features more than 35,000 applications available to consumers in 77 countries, enabling developers, including retailers, to reach tens of millions of iPhone and iPod Touch users. – Internet Retailer.

LBS subscribers forecast by ABI Research

LBS subscribers forecast by ABI Research

Looks like the relevance of LBS will keep on growing till the development of new mobile devices & mobile operating systems used in NetBooks keep on evolving. And as LBS goes mainstream data plan will also reduce considerably, surely LBS has a great future!

I couldn’t have asked for a better video to end my post! CNN reporter Susan Candiotti explains  the pros & cons of  Location-Based Marketing.


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