GPS-Enabled Location-Based Services Subscribers Will Total 315 Million in Five Years

In 2011, the total population of GPS-enabled location-based services (LBS) subscribers will reach 315 million, up from 12 million in 2006, according to a new study from ABI Research. Put another way, that represents a rise from less than 0.5% of total wireless subscribers today to more than 9% worldwide at the end of the study's 5-year forecast period.

"Regions of greatest growth will be North America and Western Europe," says senior analyst Ken Hyers. "The Asia-Pacific region will have strong growth as well, but it will vary by market. Leaders South Korea and Japan will continue to be engines of LBS growth, but North America, which has seen strong business use for several years, is expected to see significant consumer uptake in 2007 and beyond."

The LBS market took off first in South Korea and Japan, driven by personal navigation and some family- and people-finder services. In the United States, Nextel and Sprint initially drove LBS adoption with a focus on fleet applications. In 2006 Verizon Wireless also entered the market and has three applications available currently, with as many as five more planned for rollout over the coming months.

Market growth in Western Europe has been limited by the fact that very few GSM/WCDMA handsets have GPS, but ABI Research expects that beginning in 2007 and increasing in 2008, many more WCDMA 3G phones will contain GPS chipsets, allowing operators to offer LBS. Anticipating this, at least one additional operator will be offering GPS-enabled LBS in Europe starting late in 2006. ABI Research expects that in 2007 at least four major operators in Western Europe will follow suit.

"GPS services will drive the adoption of UMTS 3G handsets," says Hyers. "3G growth has been limited by customers' low uptake of many 3G services, making it uneconomical for operators to subsidize these handsets heavily. GPS-enabled LBS is expected to lead subscribers to use more 3G data services, and thereby to drive overall 3G handset sales."

ABI Research's new study, Location-Based Services, examines the market opportunities for LBS from a handset-based perspective, focusing on location technologies, operator deployment strategies, and GPS-enabled handset evolution. Major forecasts in this report include GPS-enabled LBS subscribers by major world markets and by major application class, and GPS-enabled handset shipments by major world regions.