Locating Wireless Revenue, Value
"Can you find me now?" may become the mantra among cell phone owners as research indicates that location-based services will likely become the next big wireless app.
"Can you find me now?" may become the mantra among cell phone owners as research indicates that location-based services will likely become the next big wireless app.
“Can you find me now?” may become the mantra among cell phone owners as research from ARC Group indicates that location-based services (LBS) will account for over 40 percent of worldwide operators’ mobile data services revenues in 2007, and Ovum predicts that the Western European market alone will account for $6.6 billion by 2006, with 44 percent of mobile phone owners using LBS.
Furthermore, location services will reach 748 million users worldwide by 2004, says ARC Group, up from 72 million in 2001. Within five years, almost half of the 160 million mobile computing devices shipping will have embedded cellular data modems, the market research firm predicts. Additionally, by 2004, 80 percent of all cell phone, wireless computing device and automotive telematics [define] users, combined, will employ some kind of location services, and 95 percent of wireless-enabled computing device users will employ LBS.
LBS refers to wireless mobile capabilities that allow operators to offer geographic-specific information, much like E911 [define] in the United States. However, ARC group predicts that the most popular usage for LBS won’t be for emergency response, but for infotainment.
End-users with LBS will be able to obtain proximity information from their cellular providers, such as finding the nearest restaurant or theater, along with news, sports results, weather, traffic, and community activities. Navigation and tracking LBS follow infotainment as popular services. Other LBS applications include business fleet and team management, tourist information, dating services and buddy finders, lone worker or sportsman trackers, vehicle locators, and games.
“The cost of deploying LBS is relatively high so operators want to understand their market before introducing a wide variety of services. However, consumer services are being deployed. This is especially true in Europe and Asia where operators are rolling out services as business cases merit rather than waiting for high-precision location technology to be rolled out,” said Karen Walsh, senior analyst and consultant, ARC Group.
According to research from Driscoll-Wolfe, the interest is already there and consumers are willing to pay for the benefits of LBS.
Results from eight focus groups conducted in U.S. metropolitan areas in February 2002 indicated that 53 percent of those who use cellular at least once a week would pay $10 or more for location capability in a cellular phone. However, 61 percent of frequent cellular users (41+ calls per week) would pay for location capability, as would 62 percent of PDA users.
Also, 60 percent of those with a luxury vehicle (priced at $50,000+), as well as 60 percent of the total respondents expressed strong interest in location-based roadside assistance. Half of those with a luxury vehicle were strongly interested in stolen vehicle tracking, compared to 41 percent of total respondents. Finally, 38 percent of luxury vehicle owners were interested in navigation assistance services, while only 29 percent of the total expressed similar interest.
Driscoll-Wolfe also found that 59 percent would pay $10 or more for a package of telematics services, including emergency and collision notification, roadside assistance, stolen vehicle tracking, navigation assistance, traffic alerts and related services. Nearly three-fourths of those who use cellular frequently (41+ calls per month), those with high incomes ($100,000+) and those who own or lease luxury vehicles would pay for the services. Among those with a strong interest in subscribing to the new satellite radio services, 86 percent would also pay $10 or more for telematics services.
Other significant findings from Driscoll-Wolfe include: