I came across this interesting article on GPSWorld this morning that suggests mobile advertising — and not the sophistication of new-age smartphones — will drive the LBS market going forward.

The author suggests that as new smartphones enter the market that are “tricked out” with location-enabling technologies, a so-called “so what” factor is beginning to take hold.  He goes on to suggest that “the realization is that some mechanism has to drive the [LBS] market — and that driver will be mobile advertising.”

“When companies first started thinking seriously about LBS more than 10 years ago, it’s unlikely that most of them were clairvoyant enough to get that there would be a fusion of advertising, mobile local search, and mobile social search that would propel their businesses into the real world where fortunes could be made,” said Mike Dobson, TeleMapics president.

“In 2007, I wrote a manuscript titled ‘Local Search Meets Social Search’ for mind commerce, and it sold a total of one copy, so even recently there was not much awareness of, or perhaps interest in, the coming change.  Don’t get me wrong, many companies will make big bucks writing software or providing platforms that enable others to offer LBS and not have a thing to do with advertising,”  Dobson said.  “In the end, however, LBS will be driven by advertising revenues, and these numbers will eclipse all other LBS-related revenue sources.”

Dobson goes on to say that geo startups like Gowalla and Foursquare are poised to be the advertising platform of choice going forward, which falls in line with what I’ve always said.  “I suspect the movie companies, record companies, and associated entertainment providers, as well as the feeding industry, will flock to location-enabled social networking since the demographics of the distribution channel seems well matched to their product mix,” he said.  I’ve long stated that the likes of Foursquare, Gowalla and the droves of other LBS startups will drive the next revolution of mobile advertising, once the kinks have been worked out and viable advertising models can withstand long-term evolution.

What do you think; is it consumer interest in — what Dobson calls — “snazzy phones equipped with big screens, GPS, accelerometers, and other devices,” that will drive the LBS market, or will it be the apps, services and subsequent mobile advertising concepts that drive the market?