Research firm sees rising revenue from location-based mobile apps - Mobile World Live

Research firm sees rising revenue from location-based mobile apps

24 NOV 2011

Mobile location-based service (LBS) revenues in Europe are forecast to grow from EUR205 million in 2010 at a CAGR of 13.4 percent to reach EUR435 million in 2016, according to a new research report by Berg Insight.
The firm estimates that 20 percent of all mobile subscribers in Europe already use some kind of location-enhanced application on a regular basis. Local search, social networking and navigation services are the top apps categories in terms of number of users. The social networking category is forecasted to experience the highest growth in the coming years.
In North America, the larger installed base of GPS-enabled handsets and smartphones has enabled higher uptake of LBS. Berg Insight estimates that about one third of mobile subscribers in the region now access LBS on a regular basis with navigation apps particularly popular.
The total North American LBS market is forecasted to grow at a CAGR of 2.3 percent from US$620 million in 2010 to reach US$710 million in 2016.
“Higher adoption of smartphones is driving usage of mobile Internet services and apps in general. As more and more developers add location support in their apps to enhance the user experience, LBS is now gaining mainstream acceptance among mobile subscribers”, said André Malm, Senior Analyst at Berg Insight.
He adds that integration of GPS in handsets is an important enabler. “The installed base of GPS handsets in Europe has reached 35 percent of total handsets and surpassed 70 percent in North America.”
The firm notes that the revenue model for many mobile apps in the consumer segment is shifting from premium fees to ad-funding – and that this is also the case for LBS where navigation services (for example) are becoming free for end-users and developers monetise their offerings through ads and various service bundles.