BOSTON-The mystery of how mobile location services will make money could be solved by the increasingly popular and consumer-friendly appeal of mobile commerce and its related advertising, both of which will account for $8 billion in revenues by 2005, predicts research and analyst firm Ovum in its report, “Mobile Location Services: Market Strategies.”
Approximately $10 billion in m-commerce transactions will be powered by automatic location determination technology, and the mobile location services market overall is expected to be valued at about $20 billion by 2006, Ovum said.
Fluctuating demand for the different services over time and the emergence of consumer demand for m-commerce will see new business models emerge. Information services are expected to account for the biggest portion of mobile location revenues until 2003, but in 2004, m-commerce will take the lead.
Vendors traditionally have focused on vertical markets such as tracking delivery vehicles, but attention is steadily turning to the consumer market.
“There was a feeling mobile location could help to preserve customer ownership-you may not know who the customers are, but at least you will know where they are,” said Jeremy Green, principal consultant at Ovum and co-author of the report, shortly before the report was published.
He said price will have a strong influence on the uptake of location services. Ease of use and personalization also will drive revenue and subscriber numbers.
Research from Ovum’s report also suggests mobile location accuracy is overstated and not as paramount to the industry’s success as previously thought.
“Many applications can be well supported with low levels of measurement accuracy if the applications and user interfaces are well designed,” said Green. “In addition, high levels of accuracy will not compensate for the poor design of an application. Applications developers should concentrate on the quality of the user experience rather than technical performance indices,” Green said.
Although there are no clear-cut business models as yet, Green said it is important that companies involved in mobile location services get the ball rolling now.
