LBS Gears Up for Growth

August 13, 2008

The growth of the location based services (LBS) market is driven by the emergence of connected navigation devices, the development of new device form factors with advanced user interfaces such as the iPhone, the expected pervasiveness of GPS-enabled phones, and the availability of affordable data plans, with both converged and dedicated navigation and telematics solutions vying for dominance.

“While location-industry value chains have long remained fragmented, the ongoing trend towards consolidation is finally moving the location based services industry into a mature stage,” says ABI Research principal analyst Dominique Bonte. “The expected growth of the LBS and navigation applications and services market and the necessity of improving profitability through economies of scale are the main drivers behind these vertical integration trends. These forces are demonstrated by the acquisition of digital map providers by PND vendor TomTom and handset manufacturer Nokia, the increasing dominance of a limited number of major brands, and recent efforts by carriers to enter the LBS market in Europe and the US.

While the LBS market has been characterized by a large number of services, the industry is now increasingly focused on a limited number of applications such as off-board navigation and social networking, around which features such as location-based search and friend finders are centered.