Location Ecosystem Still Looking for Sustainable Growth and Viable Business Model
Published on: 15th Nov 2008
Note -- this news article is more than a year old.
Despite the relative success of Personal Navigation Devices (PNDs) and industrial GPS applications, the location ecosystem has yet to reach a mature stage as it continues to encounter challenges on its way to continued profitable growth. While penetration levels of consumer telematics and LBS services remain low, the more established product categories suffer from price erosion and dwindling margin levels as evidenced by the recent financial results of PND vendor TomTom.
"The location industry remains largely undecided on preferred device form factors, acceptable business models for connected services, addressable user segments, positioning technologies and most importantly which services and content offer most value to the end user," says ABI Research director Dominique Bonte. "The industry is still characterized by too much experimentation, with navigation vendors moving from PNDs to handset-based navigation and vice versa, diluting their market and brand positions in the process.
Each player in the ecosystem should capitalize on its strengths and focus on increasing the quality, user experience, brand identity, market share and global coverage of its solution while looking for partners whenever possible in order to decrease costs. At the same time the location industry should collectively strive for more standardization and cooperation, and open up their platforms to the entire mobile industry thus reducing fragmentation and isolation for the benefit of the complete ecosystem.
Above all, a long term perspective is needed: single-minded investing in fundamental future drivers such as connectivity, location-based advertising, the use of Wi-Fi for better in-door coverage, and capitalizing on location-based social networking.