Mobile Commerce Nour El Kadri University Of Ottawa

What is m-commerce? Using wireless devices to perform a transaction Different from e-commerce as we know it now Will initially be mainly small value items < $10 Payment systems will be different Airtime providers could provide brokerage

A definition “Any Transaction with a monetary value that is conducted via a mobile telecommunications network” Durlacher Research, 2000 NTT DoCoMo’s i-Mode Portal Nordea’s WAP Solo Mobile Banking Service Webraska’s SmartZone Platform

Currency & Payments Electronic wallets have better chance with m-commerce than e-commerce Credit cards unlikely to be used

Users 10 – 16 Ring tones, games, screensavers, graphics 16 – 20 Books, CD’s, MP3’s 20 – 35 Restaurant booking, Theatre tickets 35 + any ideas?

Buyers and Items Initially m-commerce will lend itself better to certain types of purchases. What will….. –Ring tonesBooks –GraphicsCD’s –GamesFood What won’t….. –Big ticket items –Clothing –Electronic goods –Visual Items (i.e. you need to see before you buy)

Ordering on-line - Problems Text entry too difficult The Real Commerce Company states -6 seconds on a keyboard -25 seconds with predictive T9 input -47 seconds without predictive input. Dependant on device, but never perfect Personal file holding the users details Vendors have a lot to do to sort out interfaces

The Forces Behind M-Commerce Proliferation of Mobile Devices Convergence of Mobile Telecommunication Networks and the Internet Transition Toward Third Generation Telecommunication Technologies and Higher Data Rates Explosion of Personalized, Location Sensitive, and Context Aware Applications and Services

Proliferation of Mobile Devices Deregulation in Europe and adoption of GSM as the standard  roaming across the continent Japan, Europe and North America…saturated market  Demand in asia is driving growth PDAs –6 million in 2000 –20 million 2002 –500 million 2006

Proliferation of Devices Support for PIM applications, calendars, contact lists,… Hybrid systems….Phone with PDA –Nokia 9210 communicator –Handspring Visor Phone –Motorola Accompli 008 –Now…blackberries, i-Phones…. Java enabled models 2001 Cameras, MP3 Players… Wrist Watches with browsers Jewelry doubling with cell phones at trade shows Standards….WAP and Java 3GPP MExE

Convergence of Mobile Telecommunication Networks and the Internet Data Traffic revenues dominated voice Internet to Mobile phones: –Little memory –Low transmission speeds –Frequent disconnects –Small displays –Tiny keyboards –Many wireless communication standards Technologies: HDML XHTML WML cHTML

Transition Toward Third Generation Telecommunication Technologies and Higher Data Rates GSM TDMA, CDMA1– speed 9.6 to 14.4 Kbps –Circuit Switched –Voice applications in mind –Expensive for using internet services 3G –144 Kbps and up –Packet Switched Transition from 2G to 3G – GPRS and EDGE UMTS official European Standard, CDMA2000

Explosion of Personalized, Location Sensitive, and Context Aware Applications and Services 200 billion SMS messages in 2001…it is exponentially increasing Mobile banking, mobile directory services, mobile ticketing, entertainment services, network games, dating services, ring tones,… Personalization is needed for mobile devices due to input/output limitations and the time critical nature of services

What’s So Special About M- Commerce? Drivers will push it to a market of tens of billions of dollars M-Commerce is More than a distribution Channel with its own idiosyncratic technologies –Services –Usage Scenarios –Business Models –Regulatory Challenges

Usability Challenges Limited Screen Limited input functionality Limited memory and processing power Low data rates and frequent disconnects Avoid the big displays of E-Commerce… Ads, privacy statements, search results…

Usability Challenges - Solutions Avoid information overload Personalization is the key CRM focus on locations, activities and surrounding environments Walk away from dumb menus to smarter interfaces WAP and VoiceXML

New Usage Scenarios SMS messages Checking for participants in interactive games Banking on your phone Looking for a near restaurant Paying your parking meter using your mobile device Checking departure of next flight Looking for stock quotes

New Business Models Mobile operators as transaction support providers Leverage their CRM advantage and Lead value creation Billing details, user location and preferences are critical in such models

Interoperability Culture of openness and interoperability Economies of scale Complex value chains Consumer demand for global roaming and affordable services Reconciling the many standards and technologies: –Data transfer –Billing –Location tracking –Payment

Security and Privacy Challenges Vulnerability to the air interface Limited computing power of mobile devices Low data rates and frequent disconnection Connection to corporate systems  target for hackers Personalization vs. Privacy W3C and Mobile Marketing Association Standards….early stages.

Summary Mobile commerce is new….lots of uncovered challenges and risks Social networks are capitalizing a lot on the mobile technology offers Infrastructure is there…the business has to catch up Engineers will have to adapt to new models of development.