New dawn for location-based apps

Mobile Location Based Services (MLBS) promised much between 2000-2007, but delivered very little in terms of commercial applications.

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New dawn for location-based apps
By  Bruce Gibson and Windsor Holden Published  April 26, 2010 Communications Middle East & Africa Logo

Mobile Location Based Services (MLBS) promised much between 2000-2007, but delivered very little in terms of commercial applications. Even in Japan and South Korea, the most advanced markets for commercial MLBS, usage was disappointingly low.

Technical and commercial constraints generally outweighed the perceived advantages - both for potential users and potential service suppliers.

But in 2008 and 2009 the MLBS market underwent a dramatic change. 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 large numbers of consumers to location enabled apps. While it is easy to point to these events as being "defining" in the development of commercial MLBS, a far larger number of things came together at the same time, heralding a new dawn of the "age of location".

While 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 on the development of MLBS.

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 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 4G. 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 mobile internet. 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.

The use of some mobile location based services and location enabled apps also 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.

The powerful drivers for MLBS and location enabled apps are forecast to propel global market revenues 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.

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.

While the growth of location enabled apps have generated many of the recent MLBS headlines, by far the largest number of current MLBS users access the services via mobile internet browser and messaging applications. These MLBS apps 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.

Juniper Research is a UK-based company specialising in analytical research reports and consultancy services in the mobile, wireless, broadband and IP convergence sectors.

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