Location-based mobile
social networking services continue to expand into new markets, as illustrated
today by industry player GyPSii’s announcement that its technology would now be
pre-packaged with the latest generation handsets from Chinese manufacturer
Ramar. Market research firm ABI Research (ABI) has revealed the results of its prospective investigation in
the field, estimating that the revenue it generates will reach $3.3 billion by
2013.
As noted by ABI, the
radical shift operated by geo-local social networking is that it offers users
the ability to share real-life experiences via geo-tagged user-generated
multimedia content, exchange recommendations about places, locate and meet
nearby friends on an impromptu basis, so that online and offline networking
become more intimately intertwined. This
evolution, ABI recalls, has been made possible by the extension of outdoor
wireless internet coverage, notably thanks to hybrid technology such as
Skyhook, which combines GPS, Wi-Fi- and Cell-ID, alongside location-based
platforms such as uLocate’s Where. So
much is history.
The study aims to assess
market trends in mobile social networking, review new features, identify
obstacles to growth and provide detailed critical descriptions of the main
market players and their development strategies. It incorporates regional revenue forecasts
for each network-type.
Several factors are identified
that remain a drag on mobile social marketing campaigns, including persistent
privacy issues, the cost of data transmission through mobile media and the
difficulty for smaller brands to achieve significant visibility in a
particularly fragmented market. A sign
of its potential for growth can be read, however in the fact that these
concerns have discouraged neither important buy-outs such as Plazes’s acquisition
by Nokia, nor the development of new geo-local networking services as with the
beta launch of the location-enabled Nokia Chat social instant messaging
application.
Summing up and illustrating
the investigation’s conclusions, ABI principal analyst Dominique Bonte comments
that, “While location-based advertising integrated with sophisticated
algorithms holds a lot of promise, the current reality rather points to
licensing and revenue-sharing models as the way forward for social networking
start-ups to grow their customer base and reach profitability. Recent
evidence: the agreements between GyPSii and both Garmin and Samsung. Similarly, Loopt has established partnerships
with all major US cellular carriers.”
ABI Research is a market
research firm specialising in the economic impact of emerging technologies.