A new report from Berg Insight predicts that mobile location-based service (LBS) revenues in Europe will grow from 205 million EUR in 2010 at a compound annual growth rate (CAGR) of 13.4% to reach 435 million EUR in 2016. The research company estimates that 20% of all mobile subscribers on the Old Continent already use some kind of location-enhanced application on a regular basis like local search, social networking and navigation services. The social networking category is forecasted to experience the highest growth in the coming years.
In comparison, the larger installed base of GPS-enabled handsets and smartphones has enabled higher uptake of LBS in North America. Berg estimates that about one third of mobile subscribers now access LBS on a regular basis and the total North American LBS market is forecasted to reach $710 million in 2016.
When it comes to the revenue model, it is shifting from premium fees to ad-funding with navigation services increasingly becoming free for end users, while developers are making money through ads and various service bundles. However, revenues may not grow at the same rate as usage since the mobile advertising ecosystem is still nascent. It will take some years before a successful model has been established to allow advertisers to reach out to a critical mass of active users… And you can get additional information from Berg Insight’s report brochure (PDF).