Location Based Services (LBS) Market Top Trends by Vertical & Geography

Location-Based Service (LBS) is a solution that stands for applications which integrate geographic locations information with business processes, thus helping in the analysis of location information. Location-based information is required in distinct business data sets for relating, comparing, and analyzing relationships in data. The service also provides an economical alternative to agencies with existing internal Geographic Information System (GIS) resources. As a result of these multidimensional benefits of location information, operators are considering it as an asset. This has led to numerous investments being made to extract, use, and market it. Several components including network infrastructure, database design, and application development environment needs to be addressed for supporting LBS technologies which are based on multi-tier client-server technologies. The development of LBS represents the first step in realizing the Spatial Data Architecture (SDA), thereby offering greater scalability and flexibility to the existing LBS options.

Market Definition and Segmentation

MarketsandMarkets defines LBS as an information service provided by a device that knows where it is and modifies the information it provides accordingly. The global LBS market is broadly classified on the basis of application. Major applications include mapping, infotainment and discovery, business intelligence and analytics, emergency support and disaster management, leisure and social networking, location-based advertising, games and augmented reality, and tracking.

Market Landscape

Evolving business models such as mobile ads and global deployments of 3G and 4G wireless services are promising ubiquitous connectivity for LBS. Higher advertising impact and improved customer satisfaction through real-time research are increasing the amount of location tagged information and the ability to dig into trends for big data.

 The market for LBS technology is expected to grow due to several factors such as availability of cheap GPS-enabled devices, high interest in personalizing services based on users’ location information, advancements in analysis capabilities, global deployments of 3G and 4G wireless services promising ubiquitous connectivity, as well as cost benefits from deploying solutions like vehicle tracking and management.

The revenues from LBS-based market have grown considerably over the past few years and are expected to grow further with increasing portable PDA-based e-commerce. The major areas of opportunities for these systems include navigation, local search, enterprise services, mobile advertisements via LBS, location-specific health information, tourism, consumer tracking, and other location-based business intelligence.

Market Trends

Global Market Size and Forecasts

MarketsandMarkets forecasts the LBS market to grow from $8.12 billion in 2014 to $ 39.87 billion by 2019. This represents a Compound Annual Growth Rate (CAGR) of 25.5% from 2015 to 2019. The table and graph given below highlight the overall market opportunity, in terms of absolute dollar value and Year-on-Year (Y-o-Y) growth.

Top Trends

The LBS market is lowering the costs by streamlining the access to information and reducing the number of customer required agent assistance. It provides a boost to the economy of a nation by enabling end users to receive relevant offers based on their location. The market place is expected to be catapulted with heavy demand of personalized location-based services.  The commercialization of personalized services such as no handset application download required, provision of automatically identifying locations with no manual support, along with instant access to location-specific information like nearby restaurants, driving directions, and roadside assistance are on the rise. The combination of location-based data and existing personal data creates rich and contextualized user experiences.

The cost benefits of deploying solutions like vehicle tracking and fleet management are also opening new business dimensions for many industries. Vehicle tracking systems use Global Positioning System (GPS) to keep track of multiple fleets of vehicles in real time. Fleet management solutions integrate data logging, satellite positioning, and data communication for managing transportation. It  enables services such as vehicle finance, vehicle maintenance, vehicle telematics (tracking and diagnosis), and fuel management. The leading solution providers by deployment are Masternaut (Europe), XATA and People Net (North America), TomTom Business Solutions (Europe), Digicore and Trimble (Europe), Qualcomm Enterprise Services (North America), and Transis (Europe).

Technology Trends

Mobile operators consider LBS as an additional stream of revenue generated from investments made in fixed infrastructure developments. It is expected that these services will be useful in the improvement of user experience and delivery of quality service options to the end users. Technologies such as Geographic Positioning System (GPS), mobile cell phone identification techniques, and network upgradation allow businesses to zoom into the activities of their customers in a narrowly defined interface, and thus help in conceptualizing accessible and accurate real-time data. A key driver of LBS is the degree of flexibility between the system’s technical feasibility and the overall marketing strategy.

Mobile commerce is expected to make a qualitative leap. Several technologies such as PDAs and mobile phones need to be integrated with the wireless network infrastructure. LBS need to focus on software, hardware, and wireless network blending into a plan for designing cost-effective, reliable, and high-quality systems. This area will accelerate the networking effects and lead to cost reduction and increment in customer base. Mobile network platforms are available with strategic considerations such as the range of coverage and scalability of applications and the degree of service quality at a reasonable cost. The evolution of broadband wireless infrastructure, through third generation wireless connectivity (3G) and wireless LANs (Wi-Fi) has expanded the wings of mobile services. For instance, NTT DoCoMo’s popular iMode service provides always-on Internet connectivity through proprietary GPRS network. With the growth in multimedia mobile connectivity, operators are operating LBS as a marketing strategy contributing to the bottom line. The idea of using customer location for delivering focused services is appealing and creating customer value proposition. However, there should be balanced privacy concerns with the overall cost of implementing LBS.

Adoption Trends

Trends by Vertical

Location-based services in the manufacturing sector are expected to rise at a tremendous rate in the coming future due to the need for efficient manufacturing environment with optimum operational efficiency. LBS help the manufacturing companies in tracking the Work In Progress (WIP) carriers, raw material, and equipment in order to increase productivity and labor efficiency. Companies such as Aeroscout (U.S.) have been providing LBS solutions for the glass manufacturing, tire manufacturing, and heavy equipment industries for real-time asset and personnel tracking.

Trends by Geography

Developing economies such as Asia-Pacific (APAC) and Rest of the World (RoW)  have a tremendous growth potential with regard to the Real-Time Locating Systems (RTLS) market because of the huge market in the industrial manufacturing and logistics sector. Various companies use RTLS solutions in their operations for automotive and aerospace, such as Aston Martin (Germany), Caterpillar (U.S.), BMW (Germany), and Airbus (France).

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