downtherabbithole Most smartphones are location aware; they know the coordinates of where they are on the planet, either through GPS satellites, triangulation, or both.

Applications and services can then be allowed by the user to be location aware. In return the the user can then be provided with location based services (LBS).

Most location based services work on the premise that the user checks in at the place he wants the service to be aware of. Say, a restaurant where you’re dining tonight. Knowing the location the application or service can then take various actions such as matching your location with a business so it will be easy for you to rate the service (e.g., Yelp). Or you can check in to earn virtual bragging rights in what amounts to a game (e.g., foursquare).

Likewise, an LBS can give information on stores around you, restaurants in the area, or virtual coupons and discounts available right here.

While the potential for location based services is there, the market has yet to provide a killer feature making it really useful for the mass consumer market.


Most people don’t know about the concept or existence of location awareness and location aware services or applications.

2010-location-based-services-usage-growth Despite the fact that currently not a lot of people know of location awareness and of location based services, the number of users has been steadily climbing from 12.3 million in 2009 to 33.2 million in 2010.


While the number of user climbs and has more than doubled in one year, users of location based services form a small segment of online users.

Of all US American adults, only 4% use location services; only 1% use them on a daily basis.


Predictions of the estimated size of the location based services market differ strongly. That is because the main axis along which these predictions run are penetration and revenue-per-user. If both are set to a very positive maximum the LBS market could be huge but if just one of the two is low(er) the market could be much, much smaller than expected.


Conservative estimates put the market at $6.3 billion by 2012. Estimates above $10 billion before 2015 are, as one analyst puts it, “of the Pangloss school of forecasting; assuming the best of all possible outcomes in the best of all possible worlds."

What This Means To You

“A host of wireless Internet start-ups hopes to capitalize on the ability to pinpoint subscribers by sending location-specific information such as maps, restaurant reviews, electronic coupons and targeted ads directly to mobile phones, pagers or handheld computers.”

That’s not me talking but CNET. In April 2000.

Location-based has been around before and has been hyped before. When stepping into business projects centered around it, be sure you have a clear path to value; that you have clear metrics to measure your goals and the means to measure them.

At a pop-and-a-dime it’s a good time to get in. Developing a location app isn’t too expensive; utilizing existing location based services even less.

Test the water, don’t drink the Kool Aid.