Location-based services revenues will reach €2.3 billion in Europe by 2018, driven by growing advertising revenues on social networking and local search services, Berg Insight predicted this week.
The market will grow at a CAGR of 25.8% from €735 million in 2013, the analyst firm predicted.
Growth in North America, where more people already have GPS-enabled handsets, will be slower but also substantial. The region will generate revenues of US$3.8 billion, an annual growth rate of 16.1% from $1.8 billion last year.
"Advertising is the main source of revenues for most consumer oriented LBS," said André Malm, senior analyst at Berg Insight. "Revenues are however far from evenly distributed as major players including Facebook and Google with broad audiences have attracted the majority of ad spend," he added.
Indeed, the OTT players have edged out mobile operators on the consumer side, having been more successful in using location information captured from handsets and app stores.
For mobile operators the opportunity is now in the enterprise and B2B markets, using network-based location information for services like asset tracking, fraud management and secure authentication, Berg Insight said.
60% of mobile phone users in North America currently use location-based services (LBS) at least monthly, while in Europe the figure stands at around 50%.
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