Location Based Platforms and Infrastructure Licensing Revenues Will Reach $2.2B by 2013
- Posted: Saturday, July 19, 2008
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- Author: pradhana
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- Filed under: LBS Infrastructures, LBS Service
Strong growth in Location-Based Services represents an important opportunity for LBS platforms and infrastructure vendors. While until recently the LBS infrastructure market was mainly driven by the E911 emergency call requirements in the US, the expected global deployment of commercial LBS applications by carriers will grow LBS infrastructure licensing revenue from $111 million in 2008 to $2.2 billion in 2013.
“Several trends are driving the growth of LBS services and platform revenues,” says ABI Research principal analyst Dominique Bonte. “Decreasing costs for the integration of GPS receivers in handsets, the increasing number of Secure User Plane Location (SUPL) server deployments by carriers investing in LBS infrastructure, the availability of A-GPS/SUPL-compatible handsets, and the commercialization of a growing number of LBS applications are all contributing to increasing sales of LBS-infrastructure systems such as Mobile Location Centers (MLCs), Position Determining Equipment (PDE) and Location Enabling Servers (LES).”
The LBS infrastructure market is currently dominated by Ericsson, Telecommunications Systems (TCS) and Nokia Siemens Networks with respective market shares of 31%, 24% and 18%. Smaller independent MLC vendors such as Redknee are also making inroads into the market.
Business models are reflected in a range of flexible payment options based on volume (per transaction or per LBS subscriber), flat fees, outright purchase, and even advertising-subsidized schemes with price levels dependent on the size of the carrier, the functionality, and the solution type (hosted or installed). Monthly per subscriber platform license fees typically amount to $0.71.
However, despite the expected growth in LBS services, a major threat is posed by the emergence of direct-to-consumer provisioning of remotely hosted third-party LBS applications which bypass the carrier network infrastructure, reducing carriers to the status of bandwidth providers and making LBS platforms obsolete. The challenge for platform vendors will be to focus on unique functionalities that can only be offered via carriers, such as spatial triggers, anonymous bulk location, control plane-based services, and LBS-enabled advertising as well as multi-access network solutions. [ABI Research]
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