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Increased Availability of GPS on Mobile Phones Drives Consumption of Navigation and Other LBS

SAN FRANCISCO — With GPS available on more new mobile devices, consumer demand for location-based services (LBS) such as navigation is growing, according to Telephia, a service of The Nielsen Company, and the world’s largest provider of syndicated consumer research to the telecom and mobile media markets.

In its second quarter report on mobile applications, Telephia also reported that:

Approximately 13 million mobile consumers downloaded a mobile application on their phone.
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.

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.

While location-based services deliver highly personalized offerings such as friend-finding and other location-aware features, navigation represents the lion’s share of revenue. Moreover, favorable carrier deck placement for LBS applications and the bundling of navigation services with data packages have contributed to record high downloads.

“With consumer awareness increasing, there is enormous potential for even greater LBS growth, especially since Telephia research indicates that there are approximately 130 million GPS-capable handsets in the U.S. alone, and growing,” said Doug Antone, president and CEO of Networks In Motion. “Networks In Motion is committed to remaining an LBS leader by continuing to create compelling mobile phone applications that consumers can benefit from on a daily basis.”

LBS applications command a healthy price premium compared to other downloadable mobile applications. The average price per month for an LBS application is $9.23, as compared to a range of $3.82-$5.41 for weather applications, sports, wallpapers/pictures, etc. (see Table 1). The selling price for LBS applications is roughly 180 percent of industry average. However, overall consumer penetration for mobile applications hovers around five percent, as compared to penetration rates of 7-13 percent for other downloadable content like games, ringtones and premium SMS.

“There are hurdles that LBS publishers face, most notably the relatively low incidence of application downloads when compared to other mobile data activity. Many consumers may not realize the utility of a navigation application on their mobile phone until they use it,” said David Gill, Director of Mobile Media, Telephia. “However, Nokia’s bid to buy NAVTEQ for $8.1 billion is a very positive sign for the market and validates the strength and potential of LBS.”

Table 1: Average Price Paid by Consumers for Mobile Applications (U.S.)

Mobile Application Average Price Paid

LBS $9.23
Weather $3.82
Sports $4.58
Wallpapers/Pictures $3.29
Music $4.99
Maps/Directions $3.95
Personal Organization Tools $5.41

Source: Telephia Mobile Application Report, Q2 2007