Location ecosystem still looking for sustainable growth and viable business models

18 Nov 2008

According to ABI Research, the location ecosystem has yet to reach a mature stage as it continues to encounter challenges on its way to continued profitable growth.

TomTom's recent financial results showed, that the more established product categories suffer from price erosion and dwindling margin levels, while penetration levels of consumer telematics and LBS services remain low.

"The location industry remains largely undecided on preferred device form factors, acceptable business models for connected services, addressable user segments, positioning technologies and most importantly which services and content offer most value to the end user," says Dominique Bonte, ABI Research director. "The industry is still characterised by too much experimentation, with navigation vendors moving from PNDs to handset-based navigation and vice versa, diluting their market and brand positions in the process."

According to Bonte, each player in the ecosystem should capitalise on its strengths and focus on increasing the quality, user experience, brand identity, market share and global coverage of its solution while looking for partners whenever possible in order to decrease costs.

Striving for more standardisation and co-operation, the location industry should open up their platforms to the entire mobile industry in order to reduce fragmentation and isolation for the benefit of the complete ecosystem.

There is a need for a long-term perspective: single-minded investing in fundamental future drivers such as connectivity, location-based advertising, the use of Wi-Fi for better in-door coverage, and capitalising on location-based social networking.