ABI: Location-Based Services Growing in Asia, Europe
July 29, 2008 // Published as a news service by IHS
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In 2007, North America generated 81% of the world's location-based services (LBS) revenue, but that balance will shift by 2013 when revenues will fall to just 32%.
In the same period, according to ABI Research, Western and Eastern Europe's combined LBS revenues will jump from 5% to 31%, while the Asia-Pacific region will see a rise from 11% to 27%.
"Location-based services are not a zero-sum game," said ABI Research principal 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."
Analysts said the slow uptake of LBS outside North America has had everything to do with the fact that unlike the code division multiple access (CDMA) phones so prevalent there, which have utilized global positioning system (GPS) to comply with the U.S. enhanced 911 (E911) regulatory mandate, the global system for mobile communication (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 third generation (3G) services worldwide, analysts said the opportunities for LBS service offerings will grow quickly.
That's not to say that the same applications will be adopted everywhere at the same rate, or that LBS revenues will be uniform, analysts said.
"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," said Bonte.
"However, a navigation service can cost as much as $9.99 per 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 to be generated from a particular region."
Source: ABI Research.