Juniper%20 Research%20 Mlbs10%20 White%20 Paper


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Juniper%20 Research%20 Mlbs10%20 White%20 Paper

  1. 1. Whitepaper ~ LBS Finds its Way on the Mobile LBS Finds its Way on the Mobile The New Dawn of MLBS From the turn of the millennium until the end of 2007 MLBS (Mobile Location Based Services) had promised much, but delivered very little in terms of commercial applications. Even in Japan and South Korea, the most advanced markets for commercial MLBS, usage was disappointing. Over the 2000 to 2007 period we experienced a number of false dawns. Whilst undoubtedly the industry debate that took place and the services that were launched did much to educate consumers about mobile location based services, the mass market adoption of MLBS that was anticipated did not take place. Technical and commercial constraints generally outweighed the perceived advantages – both for potential users and potential service suppliers. In 2008 and 2009 the MLBS market underwent a dramatic change and it is fair to say that it will never be the same again. Now location enablement is rapidly becoming a de facto feature of mobile applications - so much so that by 2014 location based services and location enabled apps will cease to be a special interest category. The launch of the Apple iPhone and the iTunes App Store fundamentally changed the way that developers and users viewed applications for the mobile phone. These events also introduced a large numbers of consumers to the existence and capability of location enabled apps and associated services. However, whilst it is easy to point to these events as being “defining” in the development of commercial MLBS, in reality a far larger number of things came together at the same time, heralding a new dawn of the “age of location”. These convergent factors relate to diverse areas of technology and user experience and the principal factors are summarised in Figure 1. Many of these factors are interlinked, to a large extent they are self- reinforcing with progress in one area enabling further progress in other areas – increasing the drive to create an even more conducive environment for rich media location based services. Equally a slowdown in progress in any one factor is likely to have a follow-on impact in other areas and market progress will not be uniform in all geographies. Concerns over privacy and information security could still place a restraining influence on the development of the market for MLBS and location enabled apps, but even here progress is being made. Page 1 Tel: +44 (0) 1256 830002
  2. 2. Whitepaper ~ LBS Finds its Way on the Mobile Figure 1: MLBS and Location Enabled Apps Market Drivers Source: Juniper Research Advances in Technology Lower the Barrier to Mass Adoption Over the past few years there have been significant advances in infrastructure and end user device technology. Virtually all of these have contributed to opening the door for mass market adoption of location based services and applications in some way. The deployment of high capacity network infrastructure is well advanced in developed markets, with some 20% of mobile users having access to 3G services in North America and Western Europe. This will have reached over 80% by 2014, with many having access to next generation technology (4G). However, the absence of high bandwidth services does not preclude the development of mobile location based services, but it does influence the pattern and speed of development. Linked to network infrastructure improvements is access to the mobile Internet, although the pattern of mobile Internet use does not necessarily follow the deployment of high capacity networks. Access to the mobile internet is not essential for the use of MLBS, but it is a big enabler. Juniper Research estimates that in 2009 25% of global mobile subscribers accessed the mobile Internet. By 2014 this will have reached nearly 44% giving a substantial boost to the uptake of mobile data services and location enabled services in particular. Positioning technology has also taken significant strides forward in the past few years, particularly device centric positioning such as A-GPS. Advances have not just been in the technologies themselves, but also in the cost effectiveness of those technologies. Changes to Distribution Channels and Content Availability Reinforce Advances in Technology Whilst the iPhone set new standards in Smartphone design and usability, it was the associated launch of the Apple App Store and the opening up of the applications development environment that arguably had the most influence of the development of the MLBS and location enabled apps market. Page 2 Tel: +44 (0)1256 830002
  3. 3. Whitepaper ~ LBS Finds its Way on the Mobile Since their launch, app stores have galvanised mobile content markets, particularly the flagging mobile games markets in Western Europe and North America. Juniper Research expects app stores to be a big driver of MLBS and location app development. Not only will they provide an ever widening environment for mobile applications development and distribution, but they will also help bring the benefits of mobile location technology to new markets. Improvements in “navigable” digital map content and coverage are also helping drive MLBS and improve the MLBS end user experience. Pedestrian navigation is seen as a key growth application over the next five years, building on the existing strong base of vehicle navigation usage. The constraint on pedestrian navigation has been the absence of mapping data, attributes and application links focused on pedestrian use for many markets e.g. walkways, subways, park pathways, links to public transport etc. This is changing rapidly with all major mapping content providers addressing this sector. Mobile Advertising Will Improve Monetisation Mobile advertising still has a way to go before the business models and operating mechanisms become commonplace, but Juniper Research believes that not only will mobile advertising weather the global downturn in advertising better than other sectors, but it will show exceptional growth when the recovery gets fully underway. The use of some mobile location based services and location enabled apps provides the ideal medium for location sensitive mobile advertising. The primary service type in this respect is local search. In the local search environment the user is looking for a product or service and is highly receptive to advertising. Improving User Experience Will Be The Ultimate Driver At the end of the day if the user experience of MLBS and location enabled apps is not good enough they will not be used and the quality of the user experience has been a significant constraint on the development of mobile location based services to date. This related among other things to: inadequate bandwidth of bearer services; handset constraints; mobile browser constraints; applications not built for mobile – factors which affect all rich data services. For mobile location services and location enabled apps other frustrations that could be added to the list were: • slow initial location fixes when using GPS • inaccurate location fixes on networks using imprecise positioning technology, to the extent that some mobile location based services had limited value • poor quality and timeliness of local content and particularly content that was supposed to be dynamically updated • poor quality map rendition and slow refresh rates A Vibrant Global Market for MLBS and Location Enabled Apps The powerful drivers for MLBS and location enabled apps are forecast to propel global market revenues through to over $12.7 billion by 2014. The greatest number of users is currently in the Far East & China as Japan and South Korea were in the vanguard of mobile location based service development. Now the massive Chinese market is beginning to get into the act as well. As the Chinese market develops and 3G services are rolled out, MLBS user numbers in this regional bloc will continue to outstrip every other region. Figure 2 shows the Juniper Research forecasts for the growth in revenues attributable to MLBS and location enabled app 2009 to 2014, broken down by geographic region. Page 3 Tel: +44 (0) 1256 830002
  4. 4. Whitepaper ~ LBS Finds its Way on the Mobile Figure 2: Growth in Total Global MLBS & Apps Revenues ($m) Split By 8 Key Regions 2009-2014 Source: Juniper Research Whilst the growth of location enabled apps have generated many of the recent MLBS headlines, by far the largest number of current MLBS users access MLBS via mobile Internet browser and messaging applications. These MLBS applications reach the greatest range of devices and include the type of operator portal/ASP-hosted friend finder and mobile search services that have been growing steadily for some years. Also included in this group are off-board network centric apps such as off-board navigation and server based tracking applications and location based games, which have a similar subscription based business model. Order Full Report This whitepaper is taken from the Mobile Location Based Services: Applications, Forecasts & Opportunities 2009-2014 report. It provides the most in depth analysis of the opportunity for Mobile Location Based Services and Applications to date. Using a robust forecasting methodology, the report provides global market forecasts for Location enabled apps sold through App Stores, Location enabled apps sold through other channels, Mobile location based services (encompassing off-board apps and browser apps) as well as Mobile advertising revenues attributable to each of the above. This extensive study examines the structure of the market for MLBS and location enabled apps in terms of the key drivers, constraints and players. A detailed analysis of each of the following application types is presented; Local Search & Information, Community, Navigation, Tracking, Other Consumer MLBS/Apps and Business Productivity, with each sector analysed by region, channel and type of revenue. Key Questions answered by this report: • How have advances in Smartphone technology impacted on the growth of location-based services? • Which will be the main revenue streams for MLBS? • In which markets will MLBS be most successful? • What is the likely scale of advertising expenditure on MLBS over the next five years? • How is the MLBS value chain developing and who are the main players? • Are onboard or offboard services are applications likely to predominate in the MLBS market? For more details on this report visit the website or phone +44 (0)1256 83002. Page 4 Tel: +44 (0)1256 830002
  5. 5. Whitepaper ~ LBS Finds its Way on the Mobile Juniper Research Limited Juniper Research specialises in providing high quality analytical research reports and consultancy services to the telecoms industry. We have particular expertise in the mobile, wireless, broadband and IP- convergence sectors. Juniper is independent, unbiased, and able to draw from experienced senior managers with proven track records. Publication Details Publication date: March 2010 Authors: Bruce Gibson and Windsor Holden For more information, please contact: Michele Ince, General Manager Juniper Research Ltd, Church Cottage House, Church Square, Basingstoke, Hampshire RG21 7QW UK Tel: +44 (0)1256 830002/475656 Fax: +44 (0)1256 830093 Further whitepapers can be downloaded at Page 5 Tel: +44 (0) 1256 830002