Location-based services to boom

By 2014, the market for GPS services will be worth $12.7bn worldwide

Companies should be looking to exploit an upsurge in consumer demand for location-based search and information services, says a recently published independent report.

Nearly 1.5 billion people will be using these services by 2014 and the market for them will be worth $12.7bn worldwide, according to a study by Juniper Research. The increase is a direct result of the deepening penetration of integrated GPS receivers in mobile phones.

It is no great revelation that the features that were once the preserve of high-end smartphones – such as advanced graphics handling – are now finding their way into mass-market devices. At the same time, GPS unit prices and form factors have improved considerably, making integrated GPS more cost effective and design friendly.

Meanwhile, growth in mobile internet adoption – also benefiting from improved handsets and affordable data bundles – is expected to provide further impetus to the adoption of browser-based local search services.

“The sharing culture of web 2.0 is increasingly shaping the way many location-based services and location-enabled apps develop,” said report author Dr Windsor Holden. “Social networking application usage has continued to grow at an explosive rate, while mobile-driven apps ,such as Loopt and Brightkite, have extended the web 2.0 concept further with the introduction of geo-tagged content.”

Additionally, the Juniper report found that while browser-based services will dominate the local search market, applications purchased via app stores, particularly template apps providing city guides and entertainment guides, will take a growing portion of the information services market.

However, firms looking to cash in on location-based services shouldn't rely on a business model funded by advertising alone, the report warns. “While advertising will comprise an increasing proportion of total market value, some concerns remain regarding its large-scale viability as a primary revenue stream,” it says.