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Location-Based Services Slated for 22.5 Percent Growth Through 2020

September 08, 2015

Mobile location-based services (LBS) set to explode, according to new research by analysts at research firm, Berg.

The LBS market is expected to grow by a compound annual growth rate of 22.5 percent through 2020, according to Berg. As of 2014, the global market for LBS stood at € 10.3 billion ($11.45 billion). Berg estimates that it will reach € 34.8 billion by 2020 ($38.67 billion).

“The increase in usage of LBS has resulted in significant revenue growth, especially for leading players like including Google, Facebook, Baidu, Tencent, Twitter and Yahoo!”, said André Malm, senior analyst for Berg Insight.

The social networking and entertainment category leads the way in terms of LBS, according to Berg, followed by the local search and information category and the maps and navigation category. Local search leads in revenue generation, however.

Over-the-top players dominate the space, which is leading mobile operators to instead focus on the enterprise and B2B segments.

Retail presents a particularly strong opportunity for LBS. By employing LBS, retail firms such as Macy’s and Lord & Taylor can push special coupons and opportunities to customers when they are in a specific area of a store.

image via Shutterstock

Other firms outside the retail sector also can benefit, however. Sports arenas can use LBS to upsell tickets or initiate special promotions, and chains such as Starwood Hotels can use the technology to do away with hotel keys entirely.

Helping to drive the LBS trend is beacon technology, which is currently being pushed by Apple, Google and others. It takes advantage of Bluetooth low-energy technology that leverages Bluetooth for LBS but without the typical battery drain that comes with always-on Bluetooth technology.

By using Bluetooth, businesses and consumers can tie LBS with authentication and advanced permission schemes so these location-based services can be customized and based on user identity, but at the same time without being obtrusive since permissions can be set by the users themselves.

There’s a lot of opportunity with LBS, which explains why the sector is slated for robust growth in the next few years.

Edited by Maurice Nagle

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