Location ecosystem still looking for sustainable growth and viable business models

Location ecosystem still looking for sustainable growth and viable business models

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 TomTom's recent financial results.

"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 characterised 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."

Bonte says that each player in the ecosystem should capitalise 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 standardisation and co-operation, 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 capitalising on location-based social networking.

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