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Ruckus Wireless Inc. (RKUS - Snapshot Report) recently completed the acquisition of YFind Technologies Pvt. Ltd. for an undisclosed sum. Through this acquisition Ruckus intends to offer value-added services to its customers by providing them a comprehensive suite of location-based services (LBS). LBS combines software having location intelligence and indoor positioning location analytics.    

Benefits from the Acquisition

Privately-held YFind Technologies is a leading provider of indoor positioning and real-time location analytics. Therefore, the combination of Ruckus’ unique, Smart Wi-Fi technology with YFind's LBS and analytical capabilities will help the former offer the improved LBS. Ruckus will also get to convert its Smart Wi-Fi networks into location-intelligent infrastructures.

LBS Technology

LBS is a convenient program offered by telecom operators and internet service providers to the retail, hospitality, education and healthcare markets primarily to understand the demographic trend. LBS identifies the geographical position of a user and provides information specific to the location.

The service providers need to constantly stay in tune with the traffic and the sales generated. In short, they need to understand the complex indoor environments, study footfall trends and enable context driven content delivery. With the help of LBS technology, Ruckus intends to provide the intelligence needed to meet these demands.

LBS’s Market Trends

A research & advisory services firm Convergence Catalyst projects the LBS global market to grow to $10.3 billion in 2015 from $2.8 billion in 2010. The firm also noted that America boasts a 51% LBS market share, followed by Asia Pacific that commands a 25% share.

Another firm, Global Industry Analysts (GIA), predicts that the LBS market will surge to $21.14 billion in annual revenues by 2015. A report, titled ‘Location Based Services (LBS): A Global Strategic Business Report’ by GIA mentioned North America to be the biggest regional LBS market registering service revenues of $695.75 million.

Popularity of LBS

The growing popularity of LBS is further highlighted by the fact that bellwethers are acquiring or expanding their capabilities. While Apple Inc. (AAPL - Analyst Report) bought WiFiSLAM and Cisco Systems, Inc. (CSCO - Analyst Report) acquired ThinkSmart; Google, Inc. and Microsoft Corporation (MSFT - Analyst Report) augmented their indoor mapping services. Also, more and more companies are delving into this indoor location technology.

Ruckus’ Opportunity

The report from GIA opined that increasing consumerism and mobile phone user base has augmented the requirement for tracking and monitoring. It is thus can be said that LBS stand a great chance to capture the increasing opportunity. Providers will surely look to cash in on this opportunity and Ruckus’s YFind acquisition is a move in that endeavor.

Ruckus’ peer Aruba Networks, Inc. (ARUN - Snapshot Report) had acquired indoor location startup Meridian in May, 2013. Another competitor Ericsson (ERIC - Analyst Report) also has a decent presence in the LBS market and the company claims to command a 40% market share.

Thus, while there is a vast business opportunity for Ruckus in the LBS segment, it also has to deal with increasing competition from heavyweights, its peers as well as start ups.

Ruckus currently has a Zacks Rank #2 (Buy).

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