Location-Based Service Market

Market Overview

The global location-based service market size was valued at USD 55.58 billion in 2022. It is projected to reach USD 368.76 billion by 2031, growing at a CAGR of 23.4% during the forecast period (2023-2031). Factors like rising demand for location-based services and smartphones drive the market growth.

A location-based service (LBS) is a software program that determines the precise location of a mobile or wireless device. Additionally, these services are used for navigating and tracking the movements of people, objects, and vehicles, as well as location-based marketing. Another way an LBS functions is by using a smartphone to access real-time geo-data points in order to obtain information, entertainment, or security data for later processing. The widespread use of wireless devices like smartphones, tablets, and other portable electronics fosters the expansion of social networking sites and opens up new channels for opportunities in location-based marketing and advertising. The demand for active check-in apps is also rising, as is the use of business intelligence tools for fraud management and secure authentication. However, rising real-time-based LBS component prices and worries about personal data security are some of the factors limiting market expansion.

Market Dynamics

What are the primary factors driving the Location-Based Service Market?

Rising Demand for Location-Based Services

The global location-based services market is anticipated to experience significant growth opportunities over the course of the forecast period as a result of the persistent demand for location-based applications in e-commerce, food delivery, tourism, and social networking applications. Retailers can analyze consumer preferences using location-based services (LBS), which also provide quick access to information about goods or services. For instance, based on customer location, retailers may plan their advertising strategies for their closest store or area-based offers. Retailers will benefit from this as it will help them generate more revenue and offer their customers customized goods and services. When it comes to location-based services, the automotive industry is becoming highly functional (LBS). LBS helps drivers of cars and trucks determine the most efficient route, which decreases downtime and boosts productivity. Vehicle telematics, emergency services, traffic services, fleet tracking, and navigation are just a few of the value-added services that automakers make sure to offer to their customers.

Rising Demand for Smartphones

The use of smartphones is growing worldwide, which accelerates the uptake of location-based services. Real-time positioning data is used by mobile applications for gaming, health & wellness, business and communication, and personal convenience. As a result, the market for location-based services is anticipated to grow as the trend of using navigation and location-based services across various business sectors increases. Additionally, a study by Skyhook found that 83% of app users said that location was important to their app experiences, which is expected to fuel the growth of the LBS market.

What are the main factors that will slow down the Location-Based Service Market?

High Cost of Investment in Location-Based Services

Currently, the cost of LBS is high because it uses pricey parts like a navigation system and high-resolution 3D cameras. For instance, GPS systems are made up of three pricey segments: the user, the control, and the space segments. These segments allow GPS devices to ascertain a user's location and time.

What are the future opportunities for the Location-Based Service Market?

Increasing Technological Advancements

Increased use of cloud computing, GPS, GNSS, wireless technologies, high-precision cameras for unmanned vehicles, and developments in advanced motion & temperature sensors are all anticipated to support market expansion. An important factor in the expansion of the global market is the integration of LBS with other wearable sensors, such as those that can measure body temperature, EEG signal, blood pressure, and heart rate in order to monitor health and provide individualized healthcare information and services. Topographical maps and the high demand for information services are anticipated to fuel market expansion. Additionally, LBS providers should soon have access to lucrative opportunities thanks to improvements in geospatial data processing, data transmission capability, and the scalability of cloud-based platforms. Furthermore, location analytics is changing as a result of emerging technologies like AI, autonomous systems, and IoT. The demand for location analytics to render fundamental features like map-based visualization to enable complex analytics for scenario analysis is anticipated to increase during the forecast period, driving the growth of the LBS market.

Regional Analysis

The global market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

North America Dominates the Global Market

North America region is the highest contributor to the market and is expected to grow at a CAGR of 21.35% during the forecast period. A sizable number of businesses with operations in LBS have regional headquarters. The expansion of location-based service (LBS) applications in the transportation and defense industries has led to growth in this region's LBS market. Applications for geospatial mapping based on LBS are becoming more and more popular as a foundation for NASA and the United States Geological Survey (USGS) operations. To create maps, conduct military reconnaissance, manage disasters, and other purposes, government and military organizations use satellite images. Based on the location that the LBS solutions provide, these images are taken. In order to gather, examine, and disseminate geospatial intelligence about the security of the nation, the National Geospatial-Intelligence Agency (NGA), a U.S. intelligence agency, uses LBS through satellite imagery. The rapid expansion of the LBS market in the region is also attributed to the high adoption of cloud computing, artificial intelligence, and the Internet of Things (IoT).

Europe is expected to witness dynamic growth in the location-based service market, with a CAGR of 29.05% during the forecast period. The countries have adopted LBS in a number of application areas as a result of the strong economic conditions. The increased use of satellite images by archaeological and heritage conservation departments is what is driving the market. With the aid of LBS, the European archaeological field has made a number of strides, including mapping excavation sites and monitoring potential archeological sites. Additionally, based on observations of the Earth made possible by images taken by satellites and aircraft using LBS, the European Association of Remote Sensing Companies (EARSC) is a trade association that offers information to various sectors, including defense, aerospace, and government. The European location-based services market is expanding as a result of the rising demand for 3D imagery and 3D scanning for geospatial and industrial applications. The global navigation satellite system (GNSS) is in greater demand from governmental and commercial organizations in Europe, which supports market expansion.

Asia-Pacific is expected to witness a significant CAGR of 29.7% in the location-based service market during the forecast period. The growth is linked to the extensive proliferation of GPS-enabled smartphone devices, due to which location-based service providers have access to a vast pool of potential customers. In addition, an increase in internet penetration is contributing to the expansion of this market. In addition, LBS is anticipated to hold a substantial market share in countries such as India, China, Singapore, and others, due to the rise in adoption of user-friendly LBS solutions and the high investment in the defense, retail, military, and public transportation sectors. The market is driven by an increase in the number of industries, such as manufacturing, construction, real estate, and tourism, the adoption of smartphones and location-enhanced marketing, and the integration of location-based search with social media websites. Asia-Pacific is one of the most prone regions to natural disasters, including floods, earthquakes, and cyclones; these disasters can be managed by NGOs and governments using LBS solutions to map, monitor, and analyze vulnerable areas.

The LAMEA region is expected to witness a moderate CAGR of 27.3% in the global location-based service market during the forecast period. Due to foreign and government investment in the geospatial industry's expansion, the market for location-based services is expanding rapidly in the LAMEA region. LBS is used to survey and examine archaeological sites, excavations, and research endeavors. Military advancements in missile and drone technology in the Middle East have implications for regional geospatial mapping, and this is expected to create additional opportunities for LBS providers in this region. LBS solutions have broad applicability in the energy sector in Africa. LBS can be used to improve the location's dependability and precision when detecting resources.

Segmental Analysis

The global location-based service market is segmented by component, technology, application, and industry vertical.

Based on components, the global market is bifurcated into hardware, software, and service.

The hardware segment is the highest contributor to the market and is expected to grow at a CAGR of 24.4% during the forecast period. The location-based services market offers a variety of hardware parts, such as GPS receivers and WLAN adapters, sensors and readers, tags and transponders, and others. Mobile devices incorporate sensors like barometers, accelerometers, and magnetometers to accurately map locations inside buildings. This market is expanding as a result of rising smartphone adoption and rising 3G and 4G network usage. To meet consumer demand, major players are increasingly creating inexpensive GPS and other components. Additionally, proximity-based marketing is rapidly expanding in popularity. The demand for location-based service hardware is also significantly influenced by the increased awareness of geo-targeted marketing.

The software segment is expected to witness a higher CAGR of 26.5%. The LBS software is used for a variety of tasks, including tools for telecommunications providers, geoprocessing, and web service functions, as well as support for handset customization. Software development platforms have specialized application program interfaces (APIs) supporting LBS. LBS software provides geospatial data transformation, geocoding, and reverse geocoding, as well as location analytics, risk analytics, and geofencing. To improve wireless user experience, location-based software has seen a significant increase in demand. Various operators are forced to adopt LBS software due to the growing need to address connectivity and data integration issues.

Based on technology, the global market is bifurcated into GPS, assisted GPS,  enhanced GPS, enhanced observed time difference, observed time difference, cell Id, Wi-Fi, and others.

The assisted GPS (A-GPS) segment is the highest contributor to the market and is expected to grow at a CAGR of 27.45% during the forecast period. Network-based and handset-assisted A-GPS has a low implementation cost and erratic coverage. Due to the integration of Cell ID and GPS, it provides greater precision compared to GPS. It uses GPS technology and BTS position to correct any errors in precise locations and links the positioning systems of GSM operators with satellite positioning. Compared to GPS, A-GPS has a number of benefits, including better location accuracy, faster connection establishment, and lower power consumption. Furthermore, increasing consumer adoption of GPS-enabled smartphones and an increase in international travel are key drivers of this technology's development, which is anticipated to support the expansion of the market for location-based services worldwide.

The enhanced GPS (E-GPS) segment is expected to witness a higher CAGR of 26.8%. With the help of E-GPS, GPS signals can be transmitted at lower power, lower cost, with quicker location fixes, and with less processing effort. This technology can be used on GSM and W-CDMA mobile devices, and it functions trustworthily indoors and in areas with weak GPS signals. This technology collects data from cellular networks to speed up GPS fixes and provide accurate and quick location sensing when GPS signal availability is low. For security reasons, all governments support the inclusion of GPS in smartphones, which is expected to result in a greater uptake of this technology. This growth is anticipated to be accelerated by the Internet of Things (IoT) and its evolving applications in manufacturing, retail, and oil & gas. Increased efforts to allay security and privacy worries, as well as increased adoption of 3G and 4G networks, could boost the uptake of this technology.

Based on application, the global market is bifurcated into location-based advertising, business intelligence & analytics, fleet management, mapping and navigation, local search & information, social networking & entertainment, proximity marketing, asset tracking, and others.

The mapping and navigation segment is the highest contributor to the market and is expected to grow at a CAGR of 16.2% during the forecast period. Through navigation and mapping, location-based services provide routes and user location. It assists with route planning using GNSS positioning for both pedestrian and vehicular navigation. LBS is also used for satellite positioning and navigation. Given that LBS provides push notifications and real-time updated schedules, mapping and navigation equipment suppliers have enormous potential for growth in the road and aviation transportation sectors. Customers who are traveling can follow their routes. In order to provide routes, these devices use the A-GPS system, which ensures an automatic connection to mobile networks in the event that the network loses connection with the satellite.

The location-based advertising segment is expected to witness a higher CAGR of 30.2%. Location-based advertising is a type of personalized advertising that uses promotional messages, advertisements, and coupons to track a person's actual location. The consumer will receive pertinent ads for goods and services that are nearby their current location, thanks to location-based advertising. Using all the data that has been provided to them, location-targeting technologies like iBeacon and Geo-fencing can enable apps to target consumers independently. Businesses have made investments in location-based marketing techniques to speak with customers directly through their mobile devices. The demand for location-based advertising is anticipated to increase as smartphone adoption in the retail and e-commerce sectors increases.

Based on end users, the global market is bifurcated into transportation & logistics, manufacturing, government & public utilities, retail, healthcare & life sciences, media & entertainment, it & telecom, BFSI, hospitality, and others.

The transportation and logistics segment is the highest contributor to the market and is expected to grow at a CAGR of 22.7% during the forecast period. The sector in this market with the highest growth potential is transportation. LBS-based innovations, such as driverless cars, are anticipated to fuel market expansion. These services are now being used by automakers to acquire the high-resolution images needed for autonomous vehicles. It is anticipated that ongoing innovation in this industry will present profitable opportunities for the expansion of these services.

The retail segment is expected to witness a higher CAGR of 29.6%. LBS technology is used by retailers to enhance customer experiences and boost productivity. They can send advertisements, suggestions, and reviews for the goods the customer browses in a store because they have access to the consumer's location. To increase customer interactions and product advertising, retailers and e-commerce websites are willing to adopt LBS. The growth of this market is also anticipated to be fueled by rising spending on digital advertising and greater awareness of proximity marketing's potential for sending personalized offers.

Recent Developments

• October 2022, Airtel launched an IoT solution that is always on to help vehicle tracking through GPS. Using this IoT solution, vehicles such as ambulances and other passenger vehicles will stay connected via different mobile network operators and ensure constant tracking and safety.
• October 2022, Microsoft Corporation launched Places, which includes GPS-style navigation for finding meeting rooms to make hybrid work models easier to adopt.