Where's the Revenue in LBS?... Report finds LBS to Generate Millions, Not Billions
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 (www.instat.com). 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
- 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
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
http://www.instat.com/catalog/cat-wp.htm or contact Erin
McKeighan; firstname.lastname@example.org at 480.609.4551. The
report is priced at $3,995 USD.
In-Stat/MDR (http://www.instat.com) 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 (www.reedelsevier.com), 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.
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