Strategy Analytics: Location Based Services Growth Can Reach $8 Billion by 2008

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Wireless Developer Network - Daily News

Strategy Analytics: Location Based Services Growth Can Reach $8 Billion by 2008

...but Carriers Must Open up the Market for Location Coordinates to Third Parties

BOSTON--March 25, 2003-- Carriers, Buoyed by the Success of SMS as a Wholesale Product, Must Now Do the Same for Location Coordinates to Generate LBS Momentum

According to the latest Strategy Analytics research, the location based services (LBS) market has been stalled due to carriers' failure to sufficiently invest in resources. Although cellular network operators can currently identify the location of users, more resources must be allocated to position determining equipment and associated platforms if mobile safety, navigational and entertainment applications are to reach their potential. While cash strapped operators are reluctant to increase their investment in location solutions, there are strategies they can pursue to catalyze the market in the near term.

Philip Taylor, Senior Analyst at Strategy Analytics comments, "In particular, operators need to develop twin track strategies for location content, offering location as a component within their branded portals, while selling on location coordinates as a wholesale product to third-party developers." Taylor continues, "Although operators originally wanted to provide all services, some are beginning to realize that location coordinates, like their billing systems, can be used as a strategic asset to build the market for mobile services."

Looking ahead, Strategy Analytics believes that the more stringent FCC requirements regarding E-911 regulations will pay off in the longer term. David Kerr, Vice President of the Strategy Analytics Global Wireless Practice, notes, "LBS service revenues in Western Europe will be overtaken by those of North America in 2006, as US carriers finally begin to realize revenue from the more accurate positioning solutions mandated by the FCC."

However, while the market will pick up from mid-2004, the suppliers of location software will continue to have a tough time over the next twelve months. Kerr adds, "Location applications are trickling onto the market, but not in time to save many middleware players. We believe that only by aligning themselves further with wireless infrastructure vendors, such as Nokia and Ericsson, or key application platform vendors, such as LogicaCMG and Openwave, can location middleware players survive in the current market."

About Strategy Analytics

Strategy Analytics, Inc., a global research and consulting firm, provides timely insights and strategic business solutions to companies operating at the convergence of information, communications and entertainment technologies. With worldwide headquarters in Newton, MA and principal offices in England, France and Germany, Strategy Analytics focuses on market opportunities and challenges in the areas of Automotive Electronics, Broadband, Telematics, Wireless Strategies and Enabling Technologies. For more information, see www.strategyanalytics.com.

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