Technology | Media | Telecommunications

Wednesday, July 09, 2008

Will Shift in LBS become CDMA Swan Song?

In 2007, North America generated 81 percent of the world's Location Based Services (LBS) revenue. In 2013, that percentage will be just 32 percent.

In the same period, Western and Eastern Europe's combined LBS revenues will jump from just 5 percent to 31 percent. The Asia-Pacific region, meanwhile, will see a rise from a 2007 share of 11 percent, to 27 percent.

"Location based services are not a zero-sum game," says ABI Research principal analyst Dominique Bonte. "It's not that Americans will lose enthusiasm for LBS. These changing shares of global LBS revenue just reflect the fact that a market which for technical reasons has been largely restricted to North America, will finally grow strongly in other world regions."

LBS's slow uptake outside North America has had everything to do with the fact that unlike the CDMA phones so prevalent there, which have utilized GPS to comply with the United States E911 regulatory mandate, the GSM handsets owned by most users in Europe and Asia have not generally offered native GPS support.

However with the broader proliferation of GPS-enabled GSM handsets in those other regions, and with the quickening rollout of 3G services worldwide, the opportunities for LBS service offerings will grow quickly.

That's not to say that the same applications will be adopted at the same rate everywhere, or that LBS revenues will be uniform. Also, does this mean that the shift in LBS global market share marks the ultimate swan song for CDMA?

Since most LBS application developers sell to the world, and most of their products are platform-agnostic, the cost per service for users is likely to be similar in all regions.

However, a navigation service can cost as much as $9.99 per month, whereas friend-finder services might only be $2.99. On that basis, as well as via cultural preferences, particular services will be popular to differing degrees in different regions. That can affect the total revenue to be generated from a particular region.