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Notes on the Location Based Services Market

By Caleb Benedict, Research Analyst, GIS/IoT, Netcentric Strategies


IBM has recently invested $1.1 billion USD into Location Based Services (LBS) and Application Programming Interface (APIs).  The investment was in the development of BlueMix, a cloud-based service, that when combined with Pitney Bowes' API programs, allow businesses to collect data on consumers based on their location and geography.

GPS enabled smartphones are introducing a whole new precision to LBS.  No longer are companies needing to triangulate between cellular towers to get a general location, when GPS data can identify the exact business location.  This enables location, business type, company name and more to be added to time and date.  Patterns of life can start to be recognized and marketing and promotional campaigns created based upon these findings.

In addition to smartphones, the IoT (Internet of Things) enables equipment, supplies, materials, vehicles, trailers etc., to all be located on a map in real-time.  We will talk more about this in another article.

It is my analysis that investments into business intelligence and meaning-making based on LBS is a requirement going forward for many industries. When user locations are recorded and studied by a cloud-based business intelligence system and strategies adjusted based upon the meaning-making of this data, then you can start delivering competitive advantages.

Benefits of Location-Based Services for companies…
·      Companies are able to study consumer habits based on geography
·      Companies can adjust business practices based on consumer locations
·      Marketers can advertise based on precise locations
·      Consumers can participate in location-based coupons and daily deals
           
Some additional notes from my recent research on the LBS market:

Facebook and Google dominate the market share of LBS - controlling 46% according to a recent Berg Insight report. As long as Facebook and Google continue to purchase companies like Instagram they will continue to dominate.

According to the same report the LBS market will grow at a 16% CAGR through 2018 and Facebook and Google will continue to control roughly half the market share throughout those years.

Heineken has been using Foursquare to allow beer drinkers to check-in when purchasing Heineken beverages. This mobile campaign is aimed at engaging consumers and building brand loyalty by offering the chance to win sports memorabilia as incentives for checking-in when drinking Heineken products.

Facebook’s Instagram is threatening the future of Foursquare by experimenting with a new, in-house location-based check-in function in place of Foursequare’s service.  Foursquare’s major clients are currently Flicker, Vine, Instagram, Pinterest, and Path. If Instagram and their 200 million users switch to an in-house check-in service and replace Foursquare this would dramatically reduce Foursquare’s market share in the location-services market.



*************************************************************
Kevin Benedict
Senior Analyst, Digital Transformation Cognizant
View my profile on LinkedIn
Learn about mobile strategies at MobileEnterpriseStrategies.com
Follow me on Twitter @krbenedict
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Join the Google+ Community Mobile Enterprise Strategies

***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.

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Kevin Benedict is the Senior Analyst for Digital Transformation at Cognizant, a writer, speaker and SAP Mentor Alumnus. Follow him on Twitter @krbenedict. He is a popular speaker around the world on the topic of digital transformation and enterprise mobility. He maintains a busy schedule researching, writing and speaking at events in North America, Asia and Europe. He has over 25 years of experience working in the enterprise IT solutions industry.

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