Proximity-based mobile social networking: outlook and analysis

1Executive Summary

Astute mobile application vendors are bringing to market applications that help mobile users connect and interact with people in close proximity. We expect this emerging market — what we call proximity-based  mobile social networking — to grow to $1.9 billion in revenues by 2016. This trend not only provides new opportunities for application vendors but also has the potential to disrupt the current social networking market and the architecture of the web.

We define ”proximity-based social networking applications” as those that use geo-proximity as the
primary filter in determining who is discoverable on the social network. This differs from location-based  social networks such as Foursquare, which simply broadcast a user’s location to existing friends. By enabling users to meet new people and interact with them and their locally relevant content, proximitybased social networking applications are far more engaging. This experience will drive user adoption, and it presents multiple opportunities for advertisers to interact with potential clients in innovative ways. Brands that can interject themselves into the experience will see valuable returns.

The rise of proximity-based social networking also lays the groundwork for long-term disruption in the mobile landscape. Any movement toward social interaction through proximity networks will drive content to the edge of networks that will be consumed by users through ad-hoc peer-to-peer local area wireless networks. This shift from wide area wireless networking to local area networking will mitigate the data burden on carrier networks while reducing their influence. In turn, this will create opportunities for new players and innovative initiatives by mobile operators.

In the future, proximity social networks will manage and define the social and technical processes that dictate connectivity and interaction among mobile users in the same location. Discoverability and privacy are at the core of these protocols, and vendors are approaching these mechanisms differently. Getting it right will be paramount to determining which vendors survive and which fail. Vendors must overcome some difficulties in order to attract a critical mass of users to create a compelling experience.

Facebook has won the first stage of the social networking market evolution, but it may miss the rise of the proximity network due to its focus on controlling identity.

Relevant Analyst
peter_crocker1da68ab915828837e0ac0785afd9b2f4b-avatar2

Peter Crocker

Founder and Principal Smith's Point Analytics LLC

Do you want to speak with Peter Crocker about this topic?

Learn More
You must be logged in to post a comment.

No Comments Subscribers to comment

Learn about our services or Contact us: Email / 800-906-8098