In last few years, the location-based service (LBS) market has evolved to emerge as an app for popular smartphones and other mobile devices. Hence, application stores have emerged to offer a wide variety of location applications for free, such as child tracking, enterprise, navigation, security/lawful intercept, and location-based advertising. As a result, the LBS market is now poised to grow for next couple of years.

A new study, LBS Platforms, released by market research firm ABI Research, predicts that the LBS platform market is ready to grow by 15 percent in next five years. At this rate, it is expected to reach $600 million by 2016. However, to achieve that result it requires a few changes. Besides moving up the value chain, the LBS service providers must also implement new global strategies to bring the service into mainstream, says ABI Research. In other words, the LBS vendors must look to other regional markets, outside their own.

The current slow growth in this space is attributed to the emergence of off-deck application stores, and continued delays to caller location mandates, such as E911. Also, small and large carriers have paid little attention to this application and have not invested much to speed up the development of LBS service, according to ABI.

Furthermore, the ABI report says that GPS has grown significantly outside of North America, but it has still to reach the levels where carriers feel there will be a strong ROI. Consequently, the LBS market has not grown in the last two years.According to Patrick Connolly, ABI’s senior analyst for telematics and navigation, “A number of measures are required to stimulate the market. LBS platform vendors must utilize their advantages over off-deck platforms and move up the value chain supporting non-consumer applications like child tracking, employee management, lawful intercept, payment/insurance verification, location based advertising, etc.”

“Navigation will remain a key segment, particularly in Latin America, but vendors must change their models supporting hosted approaches and flexible revenue share models. Looking to the long term, they must also find a solution to the indoor location problem,” added Connolly.

In fact, as per the ABI study, Europe and the Middle East are rapidly deploying the technology to create new security/lawful intercept markets. As there are no well defined location based mandates in these countries, companies are developing proprietary solutions to serve the immediate needs of the market. The ABI report suggests that if LBS platform vendors support end-to-end solutions, the LBS market can achieve the predicted growth by 2016.