Sector Report Issue 1
June 1, 2012
LOCATION BASED SERVICES (LBS) Capturing an industry in motion Offering the rare combination of utilitarian needs and social interaction, location-based services are expected to experience exponential growth over the next five years. While GPS technology has been in development for decades, the technology driving tracking systems have changed immensely in recent years, enabling the development of new products for consumers and enterprises alike. Today, GPS tracking allows enterprises to track their assets around the world in real-time; it enables people to keep track of their loved ones; and it is helping redefine how friends communicate with one another. This is a similar trend that took place during the infancy of the Internet: military technology gave way to consumers using the Internet to interact, view content and purchase goods. The consumer applications of tracking technology are just now entering their infancy, with consumers increasingly using GPS technology to find the closest ATM or notify friends where they are eating. Similarly, a growing number of advertisers are reaching out to those customers with proximity marketing.
“The LBS and PLS industry is still in its infancy and we have yet to see its full potential unleash.” -
OnStar. Since then, GPS systems in cars have seemingly become ubiquitous and 2 way GPS tracking and location-transmitting technology has come along for the ride. Today, the technology is used in a wide variety of consumer products:
In general terms, businesses use the devices to track their goods while consumers use the devices to interact with their friends and family. However, the base of growth for location based services has been the increasing number of devices in which 2 way GPS tracking and cellular location-transmitting technology is included. Companies have developed an ever expanding universe of products to suit new customer needs as the number of devices incorporating GPS increases. This rising demand for location-based services will cause the manufacturers of GPS devices to grow in the years to come, especially as consumer products companies continue to find new ways to incorporate GPS technology into their products.
Freight companies utilize satellites with GPS technology to ensure delivery and monitor shipments as they move from pick up to drop off locations.
Sony’s new portable game system- the NGP- will reportedly feature location-based entertainment.1
Products used to track children, pets and the memory impaired also rely on the technology. The market for the elderly and memory impaired is particularly important due to its size and growth.
Technological improvements have furthered the development of location-based devices and services by making the chips increasingly smaller. While the technology was previously housed in automobiles, it can now be installed in devices that fit in your pocket. As a matter of fact, the growth in the smartphone market has opened the floodgates for location-based service mobile applications. According to a report by research firm IDC, smartphone shipments increased 74.4% in 2010 to 302.6 million.2
Consumer Use Over the past five years, consumer products have increasingly relied on GPS technology. Consumers were introduced to the technology’s possibilities in 1996, with the introduction of GM’s
Smartphones were once primarily used by businesspeople but this has changed, largely due to more competitive pricing and marketing campaigns. Although location-based mobile services started in 2001, the number of smartphone users is just now reaching the critical mass for their widespread adoption. Today, these services allow consumers to do everything from finding an ATM or a child to checking in at their favorite sandwich shop. Coupled with the rising number of smartphone users, many providers of location-based services have experienced rapid growth. For example, the number of Foursquare users increased from
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Patrick Bertagna, CEO of GTX Corp
Location Based Services (LBS) GTX Corp (OTCQB: GTXO) – Featured Company Location Based Services (LBS) – continued Editorial Credits About GLX – Global Listing Exchange
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Featured Company
GTX CORP (OTCQB: GTXO)
GTX Corp is committed to pioneering, creating and delivering GPS Tracking Personal Location based Services (“PLS”) empowering the global community… Keeping you connected to whom and what matters most! GTX Corp is well positioned to capture the growing GPS tracking PLS market through its diverse product platform, licensing model, brand recognition, traction in the market, strategic partnerships and focus on customization, optimization and localization. Management of GTX is actually defining a category as evident by the Company’s social and traditional media reach and presence and differentiating themselves from the competition by focusing on customization, optimization and localization. The rising need for GTX Corp’s GPS tracking apps and solutions is influenced by several factors: 2010 - Nominated and Won the Peoples Choice Award for most innovative connected device. 2011 - Nomintated for 100 most important inventions of mankind. 2012 - Listed in Entrepenuer Magazine -100 Brilliant Companies 2012 - ABI Research identifies GTX Corp paving the way into the next billion dollar market - "Personal Tracking" GTX Corp, www.gtxcorp.com, a leader in embedded realtime miniaturized GPS Tracking Personal Location based Services (“PLS”) was founded in 2002 and is based in Los Angeles, California. Known for its game changing patented GPS Shoe - the patented smart shoe and its block buster smartphone GPS Tracking App which hit number 2 on the iTunes top grossing chart, the Company continues to pave the way with innovative geo specific and proximity alerting GPS tracking applications that help you know where someone or something is at the touch of a button. GTX Corp and its subsidiaries; LOCiMOBILE, Inc. which develops location based social networking (LBSN) applications for smartphones, Code Amber News Service, and Code Amber Alertag have an aggressive intellectual property strategy, own an extensive portfolio of 78 patents, patents pending, registered trademarks, copyrights and website properties. eMarketer estimates there will be over 63 million location-based service users worldwide this year, and 486 million by 2012.
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• Ubiquitous awareness and expanding penetration of GPS and Mobile devices. (Estimated 5.5 Billion by 2013) • Personal and asset security concerns affecting a greater portion of the population. • Increasing numbers of elderly or memory impaired. (Alzheimer’s, Autism, etc. 6 million in U.S. and growing to 115 million worldwide) • Corporations needing to manage worker productivity and logistics. • Government agencies, law enforcement and military personnel monitoring. • Massive life style adoption of Location Based Social Networking. • Proximity Advertising - The new paradigm.
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GTX Corp (OTCQB: GTXO)
117 West 9th Street, Suite 1214 | Los Angeles, CA 90015 +1 213 489 3019 direct | +1 213 489 3062 fax info@gtxcorp.com | www.gtxcorp.com LOCiMOBILE is a wholly owned subsidiary of GTX Corp
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500,000 people in March 2010 to 7.5 million just a year later. Over the next five years, location-based services are expected to proliferate in the consumer market. According to the Pew Research Center’s Internet & American Life project, some 8% of consumers between the ages of 18 and 29 use location-based social services, this is approximately twice the proportion of consumers in all age groups that report using these services.3 This is an important market as it is a highly coveted demographic for advertisers. Furthermore, it is often the first to start using new technologies, indicating the potential for further growth of location-based social services. According to a report published by Juniper Research, revenue from mobile location-based services alone is likely to exceed $12.7 billion by 2014.4 Enterprise Use
Many opportunities lie outside the traditional market infrastructure because Location Based Services is just starting to take off. Investment opportunities exist in stock exchanges abroad, especially in Asia, and the OTC’s here in the States. n
Savov, Vlad. “Sony’s next PSP, codenamed NGP.” http://www.engadget. com/2011/01/27/the-sony-psp2/. January 27, 2011. 1
Choney, Suzanne. “Smart phone growth explodes, dumb phones not so much.” http://technolog.msnbc.msn.com/_news/2011/02/07/6005519-smart-phonegrowth-explodes-dumb-phones-not-so-much. February 7, 2011. 2
Zickuhr, Kathryn; Smith, Aaron. “Pew Research Center’s Internet & American Life.” http://www.pewinternet.org/Reports/2010/Location-based-services.aspx. November 4, 2010. 3
Wauters, Robin. “Mobile Location-Based Services Could Rake in $12.7 Billion 2014: Report.” http://techcrunch.com/2010/02/23/location-based-services-revenue/. February 23, 2010. 4
Like the consumer market, the use of location-based services by enterprises is also expected to grow. Two way GPS technology allows goods to be tracked around the globe in real-time using satellites, allowing shipments to be tracked throughout the supply chain. This can be particularly important for high value assets, including pharmaceuticals, which require additional security measures. In order to fill those security needs, companies are turning to GPS systems for continuous tracking and geo-fencing technology. Devices enhanced with these capabilities alert businesses if a container leaves a designated area or is tampered with during transit.
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2011 Advertising Forecast. MagnaGlobal. December 2010.
Businesses can also use location-based services for marketing purposes. Consider this: proximity marketing can help advertisers target narrow demographic markets, when and where the consumer is most likely to be engaged. Traditionally, marketing has focused on brand recognition to help remind consumers of a particular store or product. In many cases, only repetitive exposure will ensure that a customer actually remembers a brand. With proximity marketing, however, a customer can be notified (with their consent) to sales or promotions based on their location. This largely takes the need for repetitive exposure out of the equation. Consequently, advertisers only spend precious advertising budgets when a consumer is most likely to make a purchase. The rising use of mobile media, coupled with the ability to target consumers based on their location, is expected to cause mobile advertising expenditure to rise 19.4% annually in the five years to 2016, including an estimated 32% growth in 2011 alone.5 Ultimately, location-based services will play a key role in this growth and benefit along the way. How to get exposure into the LBS market There are several ETFs that investors can explore to increase their exposure to the LBS and GPS markets. Although LBS and GPS investing in the public markets are in their infancy, several public GPS companies are increasingly providing their technology to downstream customers that operate in the LBS space. Below are several ETF’s to look for:
FXD - First Trust Cons. Discret. AlphaDEX
PZD - Alternative Energy Equities
PZJ - Small Cap Blend Equities
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EDITORIAL CREDITS Executive Editor: Ronald P. Russo, Jr., Founder & CEO of GLX – rr@glx.com Ronald is the founder of World Market Media and GLX - Global Listing Exchange. He has been an entrepreneur and an active member of the small-cap, private equity and investment banking communities for more than 19-years with key roles in brokerage operations and management, as well as strategic consulting and investment banking for emerging growth companies. Prior to founding World Market Media and GLX he held various FINRA licenses including the Series 7, 63, 24 and 27. Ronald began a career on Wall Street in 1993 as a registered rep on the sell side of the retail industry. In 1995 he had the opportunity to travel to Los Angeles and fill a management position in operations for a small regional broker/dealer. In 1997 Ronald began raising institutional private equity for small-cap publicly traded companies (PIPE’s). In 1998 he founded Silicon Alley Capital Management, where he advised and helped fund many internet / new media start-ups in New York City. In 2002 he re-entered the PIPE market participating in more than two dozen transactions until 2008 when he exited to start World Market Media. Ronald graduated from St. John’s University, Queens, NY, with a Bachelor of Science, Business Administration in 1993.
STRATEGIC PARTNERS
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+1 855 GLX INTL | +1 212 658 9009 fax | info@glx.com PALM BEACH | LAS VEGAS | LOS ANGELES | NEW YORK GLX.COM | GLX-EDITOR’S DESK | GLX-PUBLISHING | GLX-EVENTS | GLX-TV | GLX-IR | GLX-WIRE | GLX-INDICES | GLX-GLOBAL ECONOMIC COUNCIL COPYRIGHT, USER AGREEMENT AND OTHER INFORMATION RELATED TO THIS REPORT: Copyright 2011 GLX, Inc. (herein “GLX”). All rights reserved. Receipt of this report constitutes your acknowledgment and agreement to the terms herein. This Sector Report is prepared for the informational use of GLX and its affiliates. The information within this report (other than disclosure information relating to GLX and its affiliates) was obtained from various sources and we do not guarantee its accuracy. GLX makes no representations or warranties whatsoever as to the data and information provided in any third party referenced source and shall have no liability or responsibility arising out of or in connection with any such referenced source. This Sector Report provides general information only. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Past performance is not necessarily a guide to future performance. Any information relating to the tax status of financial instruments discussed herein is not intended to provide tax advice or to be used by anyone to provide tax advice. Investors are urged to seek tax advice based on their particular circumstances from an independent tax professional. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk. ADDITIONAL DISCLAIMER/DISCLOSURE: Since Q1 2010 GLX has received restricted shares of GTX Corp as compensation for advertising, news dissemination, marketing, media relations and general consulting. As of the date of this report GLX is long approximately 1.2 million shares.
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