Pyramid Research found that the increased adoption of GPS and smartphones, as well as successful new business models coupled with the continuation of mobile advertising, means that revenue will increase.
In 2008, operators gained almost 80% of all location-based service revenue but since then this has dropped to about half, despite the total market having grown five times in size. Navigation applications are the largest revenue generators for location-based technologies.
The report cites that while applications have cost advantages over personal navigation devices, Google and Nokia are shifting the business model from payment to advertising-funded.
Operators are now in a good position to catch the new smartphone navigation users while also being able to leverage the billing relationship to offer a free service and drive data usage to monetise premium services.
