Asia and Europe catching up on US LBS revenue

Asia and Europe catching up on US LBS revenue

In 2007, North America generated 81% of the world's LBS revenue. In 2013, that percentage will be just 32%.

In the same period, Western and Eastern Europe's combined LBS revenues will jump from just 5% to 31%, and the Asia-Pacific region will rise from 11%, to 27%.

ABI Research principal analyst Dominique Bonte points out that it's not a case of Americans losing enthusiasm for LBS. These changing shares of global LBS revenue simply reflect that the market – which, for technical reasons, has been largely restricted to North America – will finally grow strongly in other world regions.

The slow uptake of LBS outside North America has had everything to do with the fact that, unlike the CDMA phones so prevalent in the US that have used GPS to comply with the E911 regulatory mandate, the GSM handsets owned by most users in Europe and Asia have not generally offered native GPS support.

However, with the broader proliferation of GPS-enabled GSM handsets in those other regions, and with the accelerating rollout of 3G services worldwide, the opportunities for LBS service offerings will grow quickly.

The same applications will not necessarily be adopted at the same rate everywhere, nor will LBS revenues will be uniform.

"Since most LBS application developers sell to the world, and most of their products are platform-agnostic, the cost per service for users is likely to be similar in all regions," says Bonte. "However, a navigation service can cost as much as $9.99/month, whereas friend-finder services might only be $2.99."

On that basis, as well as via cultural preferences, different services will be more popular in different regions, which will affect the total revenue generated in a particular region.


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