Mobile location-based service (LBS) revenues in Europe are forecasted to grow to €435m (around £275m) by 2016, according to a report from Berg Insight. 

From a figure of €205m (around £132m) in 2010, this forecast represents a compound annual growth rate (CAGR) of 13.4 per cent.

In its Mobile Location-Based Services report, Berg Insight estimates that 20 per cent of all mobile subscribers in Europe already use some kind of location-enhanced application on a regular basis. Local search, social networking, and navigation services are the top application categories in terms of number of users. The social networking category is forecasted to experience the highest growth in the coming years.

In North America, the larger installed base of GPS-enabled handsets and smartphones has enabled higher uptake of LBS. Berg Insight estimates that about one third of mobile subscribers now access LBS on a regular basis. The company says that the intensifying competition in the navigation segment will lead to declining revenues in the next few years. The total North American LBS market is forecasted to grow at a CAGR of 2.3 per cent from $620m in 2010 to reach $710m in 2016.

“Higher adoption of smartphones is driving usage of mobile Internet services and apps in general. As more and more developers add location support in their apps to enhance the user experience, LBS is now gaining mainstream acceptance among mobile subscribers”, said André Malm, Senior Analyst, Berg Insight. He adds that integration of GPS in handsets is an important enabler. “The installed base of GPS handsets in Europe has reached 35 percent of total handsets and surpassed 70 percent in North America.”

Berg says that the revenue model in LBS is shifting from premium fees to ad-funding. “It will take some years before a successful model has been established that allows advertisers to reach out to a critical mass of active users. This is especially true for emerging location-based advertising,” says the company.

The report costs €1,500 for a paper copy, and €2,250 for a 1-5-user PDF. A corporate license PDF costs €4,500. To download a brochure and order form for the Mobile Location-Based Services report, click here.