There’s been rapid adoption of GPS in mobile phones, with mobile vendors seeing location-based services as a major untapped business opportunity.

Growing at a compound annual growth rate (CAGR) of 46.5 percent, shipments are forecasted to reach 770 million units in 2014, according to Berg, and they say that adoption of GPS technology has started in the smartphone segment where it is now a standard feature on all new models introduced by tier one vendors.

Berg anticipates that GPS will start to appear on mid-range handset models in late 2009 and evolve into a standard feature in the segment as well in the following years.

The report highlights several drivers behind the rapid adoption of GPS in mobile handsets, with Berg’s senior analyst, Andre Malm, observing that the mobile industry has a strategic interest in creating a platform for location-based services, which he says the industry perceives as an area with many new untapped business opportunities.

Malm also claims that GPS is a welcome sales argument for the handset manufacturers in their efforts to keep up replacement sales.

“In some countries, the feature is even required for compliance with regulatory demands for high accuracy positioning of emergency calls made from mobile phones.”