The nascent location-based services (LBS) industry is about to see tremendous growth, according to a new study from Allied Business Intelligence (ABI), Oyster Bay, NY. The report, Location-Based Services: A Strategic Analysis of Wireless Technologies, Markets and Trends, indicates that world LBS revenues will grow from about $1 billion in 2000 to more than $40 billion in 2006, representing a compound annual average growth rate of 81%.

Many factors will contribute to the growth, ABI said. Despite the obvious U.S. Enhanced-911 mandate, which calls for U.S. wireless carriers to begin selling automatic location identification (ALI)-capable handsets by the end of 2001, carriers are also looking for new revenue streams and newer ways to deliver compelling services to promote customer loyalty and reduce churn.

Most carriers have already stated their plan to pursue either network or handset-based location fixing technologies in their networks. Several companies are wrapping up initial LBS and location-relevant wireless advertising test-markets and have reported positive results. However, possible threats toward the development of the LBS industry lie in concerns over privacy issues and unsolicited wireless advertising. ABI's study shows that this should not be a major concern for subscribers because the carriers, application and content developers, and infrastructure providers have invested millions in the research and development of LBS.