A new report by Berg Insight predicts that the number of European users of mobile location-based services will grow from 20 million users in 2008 at a compound annual growth rate (CAGR) of nearly 37 percent to reach 130 million users in 2014. Local search, navigation services and social networking are believed to become the top applications in terms of number of users.

According to senior analyst André Malm, “The key enablers for LBS are rapidly falling into place. On-device application stores allow easier access to mobile services for a broader audience at the same time as flat-rate data plans make pricing more transparent. In conjunction with more operators opening their location platforms to third parties, location aggregators have started to provide common APIs for accessing location data from multiple operators. This together with ever growing GPS handset sales will allow more application developers to create location-enabled mobile applications.” Berg Insight estimates that more than 20 percent of mobile handsets shipped in 2009 will feature GPS and that the installed base in Europe will surpass 50 percent of total handsets already in 2013.

Many of the most popular services will primarily rely on advertising revenues. However, revenues may not grow at the same rate as usage because the mobile marketing and advertising ecosystem is highly fragmented and immature. It will take several years before a successful model has been established that can reach out to a critical mass of active users. At the same time, service categories including navigation and tracking can be expected to remain premium services to a large extent also in the future. “Besides monthly subscriptions and per-use fees, service providers will increasingly offer one-time fees, service bundles or device bundles to match consumer expectations” says Malm.
www.berginsight.com