Worldwide Location-Based Services to Grow Nearly 170 percent in 2008, says Gartner

Worldwide subscribers to location-based communications services on mobile devices will increase by nearly 168 percent in 2008 while revenue will grow by 169 percent, according to a new Gartner market forecast. "The market for location-based services is at a turning point, with indications of mainstream adoption in the next two to five years," said Annette Zimmermann, a Gartner research analyst.

Location-based service (LBS) technologies have been around for several years but they have not experienced the rate of success that was anticipated at the beginning. The situation is changing.

Gartner said the number of subscribers worldwide will rise from 16 million in 2007 to 43.2 million in 2008 and revenue will rise from $485.1 million in 2007 to $1,307.3 million in 2008. The number of subscribers is expected to reach nearly 300 million in 2011 and revenue is forecast to top $8 billion in 2011.

People are familiar with the small, satellite-based, GPS navigation devices in vehicles. Many want the same or similar services outside their vehicles and on their mobile phones. Increasingly, mobile phones are including GPS capabilities to supplement the less precise location sensing that is an integral function of all cellular systems. As the technology has improved, other services become possible, such as navigation for tourists and pedestrians, child location, find-a-friend and local directories and advertising.

Ms Zimmermann said: “Growth now will be stimulated by the arrival of mobile phones with built-in, precise location sensing and the arrival of new service providers, like Google and Nokia with its service offerings, keen to exploit geographic and positioning technologies.”

Different forces are driving technical developments and patterns of adoption in different regions. In the United States, the government ruled that mobile phones should always be able to call an emergency number -- enhanced 911 or E911 -- and this has stimulated accurate positioning facilities. In Europe, the drive has come from consumer demand and the efforts of handset manufacturers and service operators. In the Far East, telecommunications carriers stimulated widespread adoption, particularly in South Korea, at the beginning of the decade and they have been broadening the range of services.

“The potential of this market will drive handset vendors, carriers and other service providers to compete with each other and new entrants will appear. Increased competition will reduce subscription prices,” Ms Zimmermann said. “The value chain is complex and fragmented and vendors will need to form alliances.”

About this study

Additional information is available in the Gartner report “Location- Based Services Subscriber and Revenue Forecast, 2006-2011” (ID Number: G00153022).