According to a new research report by Berg Insight, mobile location-based service (LBS) revenues in Europe are forecasted to grow from €325m in 2012 at a CAGR of 20.5 per cent to reach €825m in 2017. The firm believes that 40 per cent of all mobile subscribers use some kind of location-enhanced application on a regular basis.

Berg Research estimates that the North American LBS market is forecasted to grow at a CAGR of 9.2 per cent from $835m in 2012 to reach $1.3bn in 2017. The larger installed base of GPS-enabled handsets and smartphones in the region has enabled higher uptake of LBS, with the firm estimating that about 50 per cent of all mobile subscribers in the region now access LBS at least monthly.

André Malm, senior analyst at Berg Insight, says the key is the rapid rate of smartphone adoption:

“Smartphones is the most important enabler for LBS adoption in general. The installed base of smartphones in Europe has now reached 45 per cent of total handsets and already surpassed 55 per cent in North America. Mobile operators still play a more central role in North America than in Europe, marketing branded services to both consumer and enterprise customers”.

However, Malm believes the operators’ central role in the LBS ecosystem is now being challenged by the “smartphone ecosystems” that bundle LBS and give developers access to location data and distribution channels in the form of on-device app stores. As a result, mobile operators are showing renewed interest in offering network-based bulk location data for advertising and analytics, as well as new services such as secure authentication and fraud management. Local search, social networking and navigation services are the top application categories in terms of number of active users.