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Total mobile LBS revenues to reach $12.7B by 2014

Due to the growth of mobile Internet usage and the surge in GPS-enabled devices, Juniper Research predicts that location-based local search and information services will be used by nearly 1.5 billion mobile users by 2014.

While technical advances in handset screens, user interfaces, processors, memory and graphics-handling technologies previously contributed to the launch of high-cost mobile devices, their features ? including GPS ? are now migrating to mass-market devices. GPS unit prices and form factors have improved considerably, making integrated GPS much more cost-effective and design-friendly.

?I suppose the key observation is simply that, after a number of false dawns, mobile location-based services are coming into their own,? said Dr. Windsor Holden, principal analyst at Juniper, Hampshire, England. ?The confluence of the Apple iPhone 3G and App Store fundamentally changed the way that developers and users viewed applications for the mobile phone.

?Indeed, location enablement is rapidly becoming a de facto feature of many mobile applications,? he said. ?However, whilst it is easy to point to these events as being ?defining? in the development of commercial mobile LBS, in reality a far larger number of things came together at the same time: advances in network infrastructure and on-device positioning technology, improvements in digital mapping content and improvements in user experience.

?The combination of these factors has been crucial to the recent upsurge both in the number of mobile LBS products on services that are available, and in their adoption by end users.?

The Juniper study found that growth in mobile Internet adoption is expected to provide further impetus to the adoption of browser-based local search services.

The sharing culture of Web 2.0 is increasingly shaping the way many location-based services and location-enabled applications develop.

Social networking application usage has continued to grow at an explosive rate, while mobile-driven applications such as Loopt and Brightkite have extended the Web 2.0 concept further with the introduction of geotagged content, according to the research.

Additionally, the Juniper report found that while browser-based services will dominate the local search market, applications purchased via app stores will take a growing portion of the information services market, particularly template applications providing city guides and entertainment guides.

Total revenues from all mobile location-based services are expected to reach $12.7 billion by 2014.

While advertising will comprise an increasing proportion of total market value, some concerns remain regarding its large-scale viability as a primary revenue stream, the report found. 

?I think that the challenge ? and the opportunity ? for marketers seeking to utilize LBS is to place the location element at the heart of the service or application,? Dr. Holden said. ?Don?t simply bolt it on as an afterthought in the hope that merely because LBS is now fashionable, it will naturally drive more service usage.

?Work with clients to create attractive, ?stickable? location-based services that ultimately can result in a far higher level of engagement with a brand or brands,? he said.