More than 40,000,000 people will be using their mobile
phones to look up maps and routes by 2012, creating a search-based
advertising market worth £354m, says market researcher Berg
Insight.
It found that the market for map-related applications should
grow at a compound annual growth rate (CAGR) of 60% from 4,000,000
users in 2007 to 43,000,000 users in 2012. Revenue from
subscriptions and advertisement is expected to reach £345m 2012
from £60m in 2007, a CAGR of 40%.
The adoption rate will be driven mainly by adding
GPS-technology
in smartphone handsets and bundling navigation and map content with
mobile devices or service plans, said Andre Malm, telecom analyst
at Berg Insight.
"This year the successful launch of the GPS-enabled
Nokia N95 has opened
up the market for handset-based navigation in Europe. The US market
already has GPS as a standard feature in all CDMA-handsets," he
said.
Malm said European operators are following Sprint, Nextel and
Verizon Wireless, which have attracted millions of subscribers to
navigation services. "Nokia is putting its weight behind a
handset-centric map and navigation platform, and Google and Yahoo!
are extending their local search and map propositions with Mobile
Web 2.0 applications," he said.
Malm said ad-funded services will account for an increasing
share of the mobile navigation market. "Navigation fits perfectly
with local search applications that offer completely new
opportunities for advertisers to target consumers in novel ways,"
he said.
Malm urged the mobile industry players to embrace the ad-funded
service model in order to stay competitive. "Maps are already
available free of charge from a host of online sources. Soon
navigation will reach that stage too, seriously undercutting
premium rate mobile propositions," he said.