LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global location-based services (LBS) market to grow at a CAGR of close to 40% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the global LBS market for 2017-2021. The report also lists outdoor LBS and indoor LBS as the two major segments based on location, of which outdoor LBS accounted for 87% of the market share in 2016.
According to Abhishek Sharma, a lead research analyst at Technavio for M2M and connected devices research, “The global LBS market is likely to witness substantial growth due to the increasing demand for LBS in tracking and navigation applications. Real-time location-based advertising, supported by GPS-enabled smartphones, has the edge over traditional advertising media. Targeting potential customers using location-enabled search and advertising helps enterprises segment customers based on behavior.”
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global LBS market:
- Increased number of mobile computing devices
- Rise in demand for personal and enterprise navigation services
- Integration of location-based search with social networking websites
Increased number of mobile computing devices
Consumers are increasingly using computing devices for multiple purposes like accessing social networking apps, reading the news, surfing the web, and checking e-mail. The expanding horizons of IoT is another reason for the growth of the market. In 2016, the unit shipment of mobile computing devices reached 2.12 billion units. It is expected to grow at a CAGR of 5.79% during the forecast period.
The demand for these devices is growing among mobile users and business travelers that have a higher need for portability and connectivity. Consumers and business users want to connect multiple devices to high-speed Internet at a lower cost. The high penetration of the Internet and the need for high data rates is driving the adoption of faster telecommunication services. Mobile data traffic is expected to increase rapidly during the forecast period. Around 40% of the mobile data traffic originates from households. Mobile data helps network operators to earn better revenue by providing better outdoor-to-indoor coverage.
Rise in demand for personal and enterprise navigation services
Navigation services include real-time navigation, LBA, and payment services. These services generate revenue primarily through the fees for map updates, advertisements that lead to purchases, and other fees (toll or parking fees). For instance, Baidu offers a map application to deliver LBS including restaurant or hotel reservation, taxi booking, movie ticket booking, and traffic updates.
The high availability and declining costs of smartphones are facilitating the adoption of workforce management services, which improve operational efficiency for businesses. Logistics companies, such as SF Express, can track the movement of goods across the country using real-time sensors by tapping into the BeiDou Navigation Satellite System.
“The adoption of mobile LBS, such as maps and in-car navigation, has increased significantly due to the high penetration of smartphones and increased use of data plans for connectivity,” says Abhishek.
Integration of location-based search with social networking websites
The use of social networking sites, such as Facebook, Twitter, and Flickr, on mobile platforms is increasing rapidly. The use of LBS applications on smartphones is also witnessing a significant growth rate. Therefore, most of the handset manufacturers and LBS providers are developing applications that integrate location-enabled search with social networking sites. This integration helps users post updates on social networking sites with exact location information.
LBS providers such as GeoSolutions, Pelago, and Loopt offer location-based mobile social networking services, which allow users to share real-life experiences using geo-tagged and user-generated multimedia content. The users can reach advertisers on their social networking sites based on their location. In addition, the integration of location-based search with social networking websites is helping local advertisers target potential users easily.
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