Abstract
“There will be money to be made from location-based services, but who
will be able to extract the value in the medium-to-long term depends on how
the situation in individual markets develops and the tactics of key
participants.” Jim Morrish, Principal Analyst.
Location-based services are a hot topic in the telecoms industry, as GPS
functionality is incorporated into an increasing proportion of handsets, and
the rise of smartphones and OS standardisation continues to catalyse the
supply (that is, applications) side of the market. Regulations, such as the US
E911 requirements and potential equivalents in Europe, are also having an
impact on the market.
However, the state of the market with regard to the commercialisation of
location-based services - that is, actually generating revenue and margins
from them - is embryonic, at best. Advertising, for example, seems to be
ideally placed to incorporate a location-based aspect: location information
could make mobile advertising a viable option for ' bricks-and-mortar'
establishments in cases where previously it may not have been, but there is
very little activity in this space, and we believe that it will be 3- 5 years
before the location-based mobile advertising market takes off. A corollary of
the market' s nascency is that it is often difficult to gauge the significance
of many of the developments that are occurring in it, because there is no
widely accepted view of market dynamics and market development against which
potential impact can be assessed.
Location-based services: homing in on viable revenue streams summarises the
status and potential development of the market for location-based services. It
includes a review of location-based application types and an analysis of
location-fixing technologies, as well as a discussion of the potential impact
that alternative technologies might have on commercial dynamics. The report
also reviews the potential impact that location aggregators might have on the
market' s development and dynamics.
Location-based services: homing in on viable revenue streams answers your key questions:
- How should operators position themselves to be able to generate long-term
value from location-based services?
- How will the alternative technologies impact the market - that is, what
role will GPS and other location-fixing technologies play?
- What does the application landscape look like, and which applications are
likely to generate value in the long term?
- When will location-based advertising take off, and which players will
extract most value from advertising?
- What will the role of location aggregators be, and what will be their
influence on market development and market dynamics?
- In which niches will operators be able to differentiate themselves, or
generate long-term value?
Author
Jim Morrish (Principal Analyst) has extensive experience within both
the mobile and media sectors. He is familiar with the full range of mainstream
mobile technologies and the relative strengths and weaknesses of potential
substitute technologies. He led the development of Analysys Mason' s business
within the mobile TV sector, delivering a number of leading-edge mobile TV
assignments and authoring several articles for publication in the industry
press. Jim has 16 years of experience in telecoms and related industries.
Prior to joining Analysys Mason, he worked for Booz Allen Hamilton, Cable and
Wireless and the BBC, and as a freelance consultant.
Table of Contents
Summary
1. LBS should be regarded as service enhancements rather than a standalone service category
- 1.1 A-GPS and network-based technologies are likely to dominate the LBS
market
- 1.2 LBS fall into three broad categories: user, monitoring and advertising
services
- 1.3 Web 2.0 services may stimulate market development, but most LBS will
be enhancements to MME services
2. The LBS market is evolving rapidly in terms of value chains and revenue sources
- 2.1 LBS aggregators and ‘open' software development platforms may
ultimately result in margin reduction
- 2.2 GPS-enabled phones have clear potential to increasingly
disintermediate MNOs from the value chain for LBS
- 2.3 Mobile operators will enjoy revenue opportunities regardless of how
the LBS operating environment evolves
- 2.4 Location-based advertising will be a key revenue source, but it is not
clear which market participants will reap the rewards
- 2.5 MNOs can also generate revenue from third-party users of location
information, but will be restricted by privacy concerns
Actions
- Key to acronyms
- Research from Analysys Mason
- Consulting from Analysys Mason
List of Figures and Tables
- Table 0.1: A framework for LBS
- Figure 1.1: Location-fixing technologies
- Table 1.1: A framework for LBS
- Figure 2.1: Evolution of value chains for LBS
- Table 2.1: Implications of value chain models for LBS
