Location based services (LBS) are software that react to a user’s geographic position like zip code, city or town name. Among its broad range of services, navigation is the most common.

A new Nielsen Mobile (formerly known as Telephia) study shows that location based services generate more than half of the mobile applications revenue in the U.S. This is primarily driven by the growing number of GPS and navigation applications on mobile phones.

What makes LBS profitable is its premium pricing strategy compared with other mobile applications like weather, sports, wallpapers, music, or personal organization tools. Its average monthly price is $9.23 while other mobile apps range from $4 to $6 only.

Nokia’s acquisition of NAVTEQ and strong interest of other players like Microsoft and Google in the navigation market can further expand this already blooming market.

Other highlights of this study include:

1. Approximately 13 million mobile consumers downloaded a mobile application on their phone.
2. Of the $118 million in revenue that downloadable mobile applications such as LBS, weather applications, chat/community, and personal organization tools generated during Q2 2007, LBS represented 51 percent.
3. Networks In Motion (NIM)—an LBS navigation publisher for products including Verizon Wireless’ VZ Navigator—secured a 27 percent share of carrier revenue from mobile applications and leads all mobile application publishers. Telenav Mobile followed with a 15 percent share of carrier revenue and is another LBS navigation publisher.

It clearly shows the vast potential of LBS in the years to come. Aside from navigation, it is also a very potent mobile marketing tool because it can deliver highly personalized offerings to mobile users.

Via MoCoNews

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