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As LBS Subscribers Multiply, Sustainable Business Models Emerging

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The number of subscribers to handset hosted location based services (LBS) increased in 2008 to more than 18 million. North America continued to be the dominant region, accounting for slightly more than two thirds of the total market, according to a new study from ABI Research. While navigation continued to lead in terms of total subscribers, two other application areas enterprise and community (including social networking) posted the highest year to year growth rates.

Developments in 2008 suggested that the industry is undergoing a transition. Traditionally, individual application providers have utilized an API (application programming interface) to grab location data to create an LBS application. Increasingly, a more sophisticated set of location-centric applications are being enabled by collaborations between LBS ecosystem partners.

According to senior analyst George Perros, "While the current, or first-generation, LBS programs provide value to users, this value has been hedged in by their reliance on handset-based GPS positioning (which has restricted the addressable market outside North America), and on network positioning, which has limited uptake due to its lower accuracy in non-urban areas.

In the past year companies have started to gravitate to a different model in which specialized ecosystem players work together to eliminate some of the existing limitations of LBS application development and implementation. "We're beginning to see LBS application providers teaming with wireless security firms and location aggregators," says Perros. The result has been the appearance of LBS applications that can utilize handset location data from a number of sources, relying less on the cellular network. Some of these applications essentially bypass the network operators, which are responding to this trend by launching their own versions of handset application websites.

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Tags: location based services  lbs  abi research  reliance  security  navigation