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  • Where's the Revenue in LBS?... Report finds LBS to Generate Millions, Not Billions of Dollars

    The market for Location-based services exists, however, recent findings from In- Stat/MDR reveals that its not the "killer-app" that it was once touted as. Instat's 200 page report on the future of LBS examines the future of LBS and reveals that its highly unlikely that carriers will break-even on their investments for atleast another decade. On a similar note, Glenn (WirelessDevnet Editor) was recently at an event in Munich where numerous presentations were made by operators from around the globe. It was quite evident when hearing about revenue generating prospects for European operators that LBS was not the solution. LBS enablers or solutions were barely evident [or mentioned] and pretty much a no-show at the event. Location-centric applications, games, and data are part of the big picture, however, don't wait for LBS to become the next killer-app - Do you still think LBS will be the killer-app? Tell us why

    Submit your resource to the WDN LBS directory

    Even though the total addressable market for offering location based services (LBS) will be large through 2006, the actual potential of that market will actually be quite small, according to In- Stat/MDR ( The high-tech market research firm reports that, despite the fact that practically every American wireless subscriber will be able to receive highly accurate location information on their mobile phones by 2005, the cost to carriers of this compliance will total in the billions of dollars and it is highly unlikely that US carriers will achieve break-even on this investment before the end of the decade.

    "US wireless carriers should look at every opportunity to find relief from the US government for the costs of complying with the FCC's E911 mandate," says Ken Hyers, a Senior Analyst with In-Stat/MDR. "In addition, these carriers should explore applications and services that use LBS and cultivate the developer community to create these applications and services, with the aim of training customers to adopt and use LBS as quickly as possible in order to speed the point at which carriers can begin to see a return on their location investment." However, In- Stat/MDR believes that the opportunity for revenue for wireless carriers from location-based services will be quite small through 2006, and can be measured in millions, not billions, of dollars.

    In the report, In-Stat/MDR has also found that:

    - In Japan, where there are often no street names or addresses except on main roads, there is a high demand for location-based services.

    - In Western Europe, where some less precise location- based services are now available, less than 1% of revenue for location providers comes from mobile users.

    - The revenue opportunity for wireless carriers for location-based services is expected to grow from $5 million in 2002 to more than $167 million in 2006. Revenues will grow through the adoption of various services, especially of those that are non-intrusive and are initiated by the user.

    - While the E911 mandate is US based, In-Stat/MDR expects location services to continue to be rolled out in other countries as well.

    - The total addressable market of location-enabled subscribers by 2006 will top 1.3 billion subscribers. However, in earlier years of In-Stat/MDR's forecast (2003 ? 2004) when network based solutions are less precise, the addressable market will actually be much less, comprising, primarily, GPS enabled subscribers, which will make up 14% and 26% of the total wireless subscriber base.

    The report, "Location, Location, Location: Meeting the E911 Mandate and Monetizing Location Based Services (#IN020260WP), summarizes the progress made by US mobile carriers to comply with the FCC's E911 mandate, and more particularly, their compliance, and expected compliance, with Phase II of the mandate. This report provides detailed forecasts through 2006 of the number of mobile subscribers that will be covered by the mandate, and breaks these forecasts out by Tier I wireless carriers, as well as total wireless carriers, and by airlink.

    To purchase this report, or for more information, please visit or contact Erin McKeighan; at 480.609.4551. The report is priced at $3,995 USD.

    About In-Stat/MDR

    In-Stat/MDR ( offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end-users.

    In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (, a world- leading publisher and information provider. With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to- business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.

    More LBS resources from WirelessDevNet

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