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2. Whitepaper ~ LBS Finds its Way on the Mobile
LBS Finds its Way on the
Mobile
The New Dawn of MLBS
From the turn of the millennium until the end of 2007 MLBS (Mobile Location Based Services) had
promised much, but delivered very little in terms of commercial applications. Even in Japan and South
Korea, the most advanced markets for commercial MLBS, usage was disappointing.
Over the 2000 to 2007 period we experienced a number of false dawns. Whilst undoubtedly the industry
debate that took place and the services that were launched did much to educate consumers about mobile
location based services, the mass market adoption of MLBS that was anticipated did not take place.
Technical and commercial constraints generally outweighed the perceived advantages – both for potential
users and potential service suppliers.
In 2008 and 2009 the MLBS market underwent a dramatic change and it is fair to say that it will never be
the same again. Now location enablement is rapidly becoming a de facto feature of mobile applications - so
much so that by 2014 location based services and location enabled apps will cease to be a special interest
category.
The launch of the Apple iPhone and the iTunes App Store fundamentally changed the way that developers
and users viewed applications for the mobile phone. These events also introduced a large numbers of
consumers to the existence and capability of location enabled apps and associated services. However,
whilst it is easy to point to these events as being “defining” in the development of commercial MLBS, in
reality a far larger number of things came together at the same time, heralding a new dawn of the “age of
location”.
These convergent factors relate to diverse areas of technology and user experience and the principal
factors are summarised in Figure 1. Many of these factors are interlinked, to a large extent they are self-
reinforcing with progress in one area enabling further progress in other areas – increasing the drive to
create an even more conducive environment for rich media location based services. Equally a slowdown in
progress in any one factor is likely to have a follow-on impact in other areas and market progress will not
be uniform in all geographies.
Concerns over privacy and information security could still place a restraining influence on the
development of the market for MLBS and location enabled apps, but even here progress is being made.
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3. Whitepaper ~ LBS Finds its Way on the Mobile
Figure 1: MLBS and Location Enabled Apps Market Drivers
Source: Juniper Research
Advances in Technology Lower the Barrier to Mass Adoption
Over the past few years there have been significant advances in infrastructure and end user device
technology. Virtually all of these have contributed to opening the door for mass market adoption of
location based services and applications in some way.
The deployment of high capacity network infrastructure is well advanced in developed markets, with some
20% of mobile users having access to 3G services in North America and Western Europe. This will have
reached over 80% by 2014, with many having access to next generation technology (4G). However, the
absence of high bandwidth services does not preclude the development of mobile location based services,
but it does influence the pattern and speed of development.
Linked to network infrastructure improvements is access to the mobile Internet, although the pattern of
mobile Internet use does not necessarily follow the deployment of high capacity networks. Access to the
mobile internet is not essential for the use of MLBS, but it is a big enabler. Juniper Research estimates that
in 2009 25% of global mobile subscribers accessed the mobile Internet. By 2014 this will have reached
nearly 44% giving a substantial boost to the uptake of mobile data services and location enabled services in
particular.
Positioning technology has also taken significant strides forward in the past few years, particularly device
centric positioning such as A-GPS. Advances have not just been in the technologies themselves, but also in
the cost effectiveness of those technologies.
Changes to Distribution Channels and Content Availability
Reinforce Advances in Technology
Whilst the iPhone set new standards in Smartphone design and usability, it was the associated launch of
the Apple App Store and the opening up of the applications development environment that arguably had
the most influence of the development of the MLBS and location enabled apps market.
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4. Whitepaper ~ LBS Finds its Way on the Mobile
Since their launch, app stores have galvanised mobile content markets, particularly the flagging mobile
games markets in Western Europe and North America. Juniper Research expects app stores to be a big
driver of MLBS and location app development. Not only will they provide an ever widening environment
for mobile applications development and distribution, but they will also help bring the benefits of mobile
location technology to new markets.
Improvements in “navigable” digital map content and coverage are also helping drive MLBS and improve
the MLBS end user experience. Pedestrian navigation is seen as a key growth application over the next five
years, building on the existing strong base of vehicle navigation usage. The constraint on pedestrian
navigation has been the absence of mapping data, attributes and application links focused on pedestrian use
for many markets e.g. walkways, subways, park pathways, links to public transport etc. This is changing
rapidly with all major mapping content providers addressing this sector.
Mobile Advertising Will Improve Monetisation
Mobile advertising still has a way to go before the business models and operating mechanisms become
commonplace, but Juniper Research believes that not only will mobile advertising weather the global
downturn in advertising better than other sectors, but it will show exceptional growth when the recovery
gets fully underway.
The use of some mobile location based services and location enabled apps provides the ideal medium for
location sensitive mobile advertising. The primary service type in this respect is local search. In the local
search environment the user is looking for a product or service and is highly receptive to advertising.
Improving User Experience Will Be The Ultimate Driver
At the end of the day if the user experience of MLBS and location enabled apps is not good enough they
will not be used and the quality of the user experience has been a significant constraint on the
development of mobile location based services to date. This related among other things to: inadequate
bandwidth of bearer services; handset constraints; mobile browser constraints; applications not built for
mobile – factors which affect all rich data services. For mobile location services and location enabled apps
other frustrations that could be added to the list were:
• slow initial location fixes when using GPS
• inaccurate location fixes on networks using imprecise positioning technology, to the extent that
some mobile location based services had limited value
• poor quality and timeliness of local content and particularly content that was supposed to be
dynamically updated
• poor quality map rendition and slow refresh rates
A Vibrant Global Market for MLBS and
Location Enabled Apps
The powerful drivers for MLBS and location enabled apps are forecast to propel global market revenues
through to over $12.7 billion by 2014. The greatest number of users is currently in the Far East & China
as Japan and South Korea were in the vanguard of mobile location based service development. Now the
massive Chinese market is beginning to get into the act as well. As the Chinese market develops and 3G
services are rolled out, MLBS user numbers in this regional bloc will continue to outstrip every other
region.
Figure 2 shows the Juniper Research forecasts for the growth in revenues attributable to MLBS and
location enabled app 2009 to 2014, broken down by geographic region.
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5. Whitepaper ~ LBS Finds its Way on the Mobile
Figure 2: Growth in Total Global MLBS & Apps Revenues ($m) Split By 8 Key
Regions 2009-2014
Source: Juniper Research
Whilst the growth of location enabled apps have generated many of the recent MLBS headlines, by far the
largest number of current MLBS users access MLBS via mobile Internet browser and messaging
applications. These MLBS applications reach the greatest range of devices and include the type of operator
portal/ASP-hosted friend finder and mobile search services that have been growing steadily for some
years. Also included in this group are off-board network centric apps such as off-board navigation and
server based tracking applications and location based games, which have a similar subscription based
business model.
Order Full Report
This whitepaper is taken from the Mobile Location Based Services: Applications, Forecasts &
Opportunities 2009-2014 report. It provides the most in depth analysis of the opportunity for Mobile
Location Based Services and Applications to date. Using a robust forecasting methodology, the report
provides global market forecasts for Location enabled apps sold through App Stores, Location enabled
apps sold through other channels, Mobile location based services (encompassing off-board apps and
browser apps) as well as Mobile advertising revenues attributable to each of the above.
This extensive study examines the structure of the market for MLBS and location enabled apps in terms of
the key drivers, constraints and players. A detailed analysis of each of the following application types is
presented; Local Search & Information, Community, Navigation, Tracking, Other Consumer MLBS/Apps
and Business Productivity, with each sector analysed by region, channel and type of revenue.
Key Questions answered by this report:
• How have advances in Smartphone technology impacted on the growth of location-based services?
• Which will be the main revenue streams for MLBS?
• In which markets will MLBS be most successful?
• What is the likely scale of advertising expenditure on MLBS over the next five years?
• How is the MLBS value chain developing and who are the main players?
• Are onboard or offboard services are applications likely to predominate in the MLBS market?
For more details on this report visit the website www.juniperresearch.com or phone +44 (0)1256 83002.
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6. Whitepaper ~ LBS Finds its Way on the Mobile
Juniper Research Limited
Juniper Research specialises in providing high quality analytical research reports and consultancy services
to the telecoms industry. We have particular expertise in the mobile, wireless, broadband and IP-
convergence sectors. Juniper is independent, unbiased, and able to draw from experienced senior
managers with proven track records.
Publication Details
Publication date: March 2010
Authors: Bruce Gibson and Windsor Holden
For more information, please contact: Michele Ince, General Manager michele.ince@juniperresearch.com
Juniper Research Ltd, Church Cottage House, Church Square, Basingstoke, Hampshire RG21 7QW UK
Tel: +44 (0)1256 830002/475656
Fax: +44 (0)1256 830093
Further whitepapers can be downloaded at http://www.juniperresearch.com
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