Location-Based Services (LBS) Ecosystem and Value Chain is Yet to Reach a Mature Stage

Location Ecosystem Still Looking for Sustainable Growth and Viable Business Models, According to ABI Research

The LBS market is characterized by a large variety of services, devices and solutions with navigation expected to remain the most important application. While the location-industry value chains remain largely fragmented, the ongoing consolidation trend will contribute to the LBS industry moving to a mature stage with stable growth driven by the increasing availability of GPS-handsets, affordable data rate plans offered by carriers, a large range of user-friendly mobile devices and a rich choice of applications offered by third party developers. At the same time converged LBS solutions continue to be challenged by dedicated navigation and telematics solutions such as Personal Navigation Devices and systems like Onstar.

Despite the relative success of Personal Navigation Devices (PNDs) and industrial GPS applications, the location ecosystem has yet to reach a mature stage as it continues to encounter challenges on its way to continued profitable growth. While penetration levels of consumer telematics and LBS services remain low, the more established product categories suffer from price erosion and dwindling margin levels as evidenced by the recent financial results of PND vendor TomTom.

"The location industry remains largely undecided on preferred device form factors, acceptable business models for connected services, addressable user segments, positioning technologies and most importantly which services and content offer most value to the end user," says ABI Research director Dominique Bonte. "The industry is still characterized by too much experimentation, with navigation vendors moving from PNDs to handset-based navigation and vice versa, diluting their market and brand positions in the process."

Each player in the ecosystem should capitalize on its strengths and focus on increasing the quality, user experience, brand identity, market share and global coverage of its solution while looking for partners whenever possible in order to decrease costs. At the same time the location industry should collectively strive for more standardization and cooperation, and open up their platforms to the entire mobile industry thus reducing fragmentation and isolation for the benefit of the complete ecosystem.

Above all, a long term perspective is needed: single-minded investing in fundamental future drivers such as connectivity, location-based advertising, the use of Wi-Fi for better in-door coverage, and capitalizing on location-based social networking.

ABI Research’s recent study, “Location Based Services (LBS) Ecosystem and Value Chains” (http://www.abiresearch.com/products/RR/LBSV) provides an overview of the services, trends, drivers, barriers, ecosystems, value chains, and forecasts associated with the LBS, navigation, telematics and GPS-handset markets. It forms part of the firm’s Location Aware Services Research Service (http://www.abiresearch.com/products/service/Location_Aware_Services), which also includes other Research Reports, Research Briefs, Market Data, an Online Database, ABI Insights, ABI Vendor Matrices, and analyst inquiry support.

About ABI Research
ABI Research is a leading market research firm focused on the impact of emerging technologies on global consumer and business markets. Utilizing a unique blend of market intelligence, primary research, and expert assessment from its worldwide team of industry analysts, ABI Research assists hundreds of clients each year with their strategic growth initiatives. For information, visit www.abiresearch.com, or call +1.516.624.2500.

Contacts
ABI Research
Nicole Fabris, +44.203.326.0142
pr@abiresearch.com

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