1. Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 6-1© 2007 Prentice-Hall, Inc ELC 200 Day 9

2. 6-2 © 2007 Prentice-Hall, Inc Agenda Questions from last class? Assignment 2 Corrected –9 A’s, 2 B’s, 6 C’s & 2 D’s Assignment 3 Feb 25 @ 3:35 PM Quiz 2 will be on Feb 28 –Chapter’s 3, 4, 5 & 6 –20 M/C @ 4 Points each –4 short essays @ 5 Points each –1 extra credit question for 5 Points –50 mins, Open Book, Open Notes Possible Extra Credit questions –Where’s my name? –Who’s this guy? >>> Discussion on Mobile Commerce Hint >>>

3. Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 6-3© 2007 Prentice-Hall, Inc Mobile Commerce: The Business of Time

4. 6-4 © 2007 Prentice-Hall, Inc The focus of this chapter is on several learning objectives The basic concept of wireless commerce The reasons for going wireless How wireless technology is employed Wireless (in)security The role of cellular phones in wireless commerce

5. 6-5 © 2007 Prentice-Hall, Inc Learning Objectives (Cont’d) Factors in designing a wireless local network The protocols for M-commerce architecture The dawn of wireless banking

6. 6-6 © 2007 Prentice-Hall, Inc Wireless Communication Transmitting signals over radio waves instead of wires Wireless LAN (WLAN) is a standard for wireless networking WLAN is becoming the backbone of mobile or m- commerce Wireless networks are just as effective as wired systems

7. 6-7 © 2007 Prentice-Hall, Inc What is M-Commerce? Transactions and payments conducted in a non- PC-based environment The transmission of user data (e.g., e-mail, spreadsheet) without wires The management of the processes that handle the product or service needs of a consumer via a mobile phone Use of wireless devices to facilitate the sale of products and services, anytime, anywhere

8. 6-8 © 2007 Prentice-Hall, Inc M-Commerce Categories of Services Information-based consumer services Transaction services Location-centric, personalized services that anticipate your purchases based on your location and data stored in your “profile” http://www.blackberry8800.com/ http://h10010.www1.hp.com/wwpc/us/en/sm/WF04a/215348- 215348-64929-314903-215381.htmlhttp://h10010.www1.hp.com/wwpc/us/en/sm/WF04a/215348- 215348-64929-314903-215381.html http://www.palm.com/us/products/smartphones/treo750/?cre ativeID=LFB|treo750_learn_morehttp://www.palm.com/us/products/smartphones/treo750/?cre ativeID=LFB|treo750_learn_more http://www.apple.com/iphone/

9. 6-9 © 2007 Prentice-Hall, Inc History of Wireless Communication 1895, Marconi successfully transmitted radio waves without using wires 1940s, two-way car radios were installed by police, government agencies, and utility companies 1969, introduction of a commercial cellular radio operation on trains running from New York City to Washington, D.C. 1978, introduction of analog-based cellular telephone services to the general public

10. 6-10 © 2007 Prentice-Hall, Inc Three Generations of Digital Cellular Technology The first generation operates in the 800-900 MHz (megahertz) frequency spectrum –832 frequencies available for transmission –Lock the channel for the caller and the recipient through the telephone company’s switch 2G started in the early 1990s –Operates between 9.6 Kbps and 14.4 Kbps in the 800 MHz and 1.9 GHz frequencies –Digital, not analog transmission –Lacks a universal system of wireless communication and lack of the bandwidth inherent in a circuit-switched network

11. 6-11 © 2007 Prentice-Hall, Inc Three Generations of Digital Cellular Technology (Cont’d) 2.5 generation is somewhere in later stages of 2G –“always on” capability –Packet-switched design 3G, marks the beginning of a uniform and global worldwide standard for cellular wireless communication, capabilities include: –Streaming video –Two-way voice over IP –Internet traffic with high quality graphics and plug-ins for a wireless phone –Transmission speeds of 144 Kbps for fast-moving mobile wireless devices

12. 6-12 © 2007 Prentice-Hall, Inc Three Generations of Digital Cellular Technology (Cont’d) Future 4G technology extends 3G capacity by one order of magnitude –http://www.wsdmag.com/Articles/ArticleID/1000 1/10001.htmlhttp://www.wsdmag.com/Articles/ArticleID/1000 1/10001.html –http://www.time.com/time/printout/0,8816,90103 1013-493250,00.htmlhttp://www.time.com/time/printout/0,8816,90103 1013-493250,00.html –http://www.wireless-world-research.org/http://www.wireless-world-research.org/ –http://www.wired.com/news/technology/wireles s_special/0,2914,69032,00.htmlhttp://www.wired.com/news/technology/wireles s_special/0,2914,69032,00.html

13. 6-13 © 2007 Prentice-Hall, Inc Generations of Cellular Service GenerationFirst2nd2.5G3G Technology AnalogDigital Data Transfer Rate Data Transfer Is Difficult 10 kbps* 20 kbps to 144 kbps to 2 Mbps Channels ~800 ~800 + 2,500 ~800 + 2,500 ? Cells/ Channel Reuse Large/ Medium Small/ High Based on 2G ? *Sufficient for Short Message Service (SMS) and wireless Web access using the Wireless Access Protocol (WAP) or i-mode

14. 6-14 © 2007 Prentice-Hall, Inc Key Consumer Benefits Time and money Anywhere functionality to stay competitive Freedom of choice Productivity and flexibility in coordination Location-centricity

15. 6-15 © 2007 Prentice-Hall, Inc Mobile Product Locations Source: U. Varshney, R. J. Vetter, and R. Kalakota. “Mobile Commerce: A new Frontier,” Computer, Oct. 2000, 3)

16. 6-16 © 2007 Prentice-Hall, Inc Wireless Application Protocol (WAP) Designed to deliver messages and data traffic to mobile phones within a geographical area Open, global, industry-wide mobile specifications for wireless network architecture, application environment, and a set of communication protocols

17. 6-17 © 2007 Prentice-Hall, Inc Wi-Fi (Wireless Fidelity) Industry standard that makes it possible for hardware firms to create wireless products that communicate with one another Access point spreads Internet access Makes the work environment more mobile and easier to shift workspaces around within the firm Security remains a major concern –Professor Gauvin’s paper on Wi-Fi (in)security wireless insecurity.doc

18. 6-18 © 2007 Prentice-Hall, Inc Wi-Fi (continued) Offices transmit data from a company’s intranet to employees on the move Employees on the move can help companies reach suppliers and improve customer service Wireless devices in a warehouse or a manufacturing facility can reduce handwritten reports and missed deliveries Wireless devices open new shortcuts to stock trading, banking, and personal finances

19. 6-19 © 2007 Prentice-Hall, Inc Key Limitations Distance Speed Security and privacy Quality of service varies Difficult for the user to remember all the phone numbers, keywords, or codes Batteries have a poor record

20. 6-20 © 2007 Prentice-Hall, Inc Key Limitations (Cont’d) Mobility does not matter when already overwhelmed with information at work Connecting charges continue to be high For certain destinations, a GPS in your car in not that useful Immediate response is expected No peace anymore in public places Poor implementation of many wireless networks

21. 6-21 © 2007 Prentice-Hall, Inc Critical Success Factors Mobility Personalization Global standardization Customer profiling

22. 6-22 © 2007 Prentice-Hall, Inc Bluetooth Universal, low-cost, low-powered wireless technology that uses short-range radio frequency (RF) to hook up wireless connectivity among computers, scanners, and printers Allows any Bluetooth-enabled device to communicate with other similar devices, regardless of manufacture Allows electronic devices to communicate and share information without action from a user, wires, or cables Low complexity Robust

23. 6-23 © 2007 Prentice-Hall, Inc Layered Bluetooth Architecture Primary layer, called the radio layer, forms the physical connection interface that oversees transmission within a small network called a piconet Second layer, is the baseband, which with a radio and an antenna makes up the physical transmission component of a Bluetooth device Link manager protocol (LMP) is a Bluetooth layer that sets up ongoing link management with Bluetooth devices –Piconet management –Link configuration –Security functions Hacking of Bluetooth is called War Nibbling and bluecasingWar Nibbling bluecasing

24. 6-24 © 2007 Prentice-Hall, Inc Personal Area Networks (PANs) Connect Devices On or Near a Single User’s Desk –PC, Printer, PDA, Notebook Computer, Cellphone Connect Devices On or Near a Single User’s Body –Notebook Computer, Printer, PDA, Cellphone The Goal is Cable Elimination

25. 6-25 © 2007 Prentice-Hall, Inc Personal Area Networks (PANs) There May be Multiple PANs in an Area –May overlap –Also called piconets

26. 6-26 © 2007 Prentice-Hall, Inc Figure 5.11: Bluetooth Operation File Synchronization Client PC Slave Notebook Master Printer Slave Printing Cellphone Telephone Piconet 1

27. 6-27 © 2007 Prentice-Hall, Inc Figure 5.11: Bluetooth Operation Client PC Notebook Printer Slave Printing Call Through Company Phone System Cellphone Master Telephone Slave Piconet 2

28. 6-28 © 2007 Prentice-Hall, Inc Figure 5.11: Bluetooth Operation File Synchronization Client PC Slave Notebook Master Printer Slave Printing Call Through Company Phone System Cellphone Master Telephone Slave Piconet 1 Piconet 2

29. 6-29 © 2007 Prentice-Hall, Inc Bluetooth automotive

30. 6-30 © 2007 Prentice-Hall, Inc Satellite Technology “Long-haul” data transmission is made possible via satellites Repeater in a satellite receives the signal representing the data and “repeats” the signal to another location

31. 6-31 © 2007 Prentice-Hall, Inc GEO Satellite System 2. Point-to-Point Uplink 3. Broadcast Downlink 4. Footprint 5. Earth Station A Earth Station B 1. Geosynchronous Satellite Satellite appears stationary in sky (35,785 km or 22,236 mi) Far, so earth station needs dish antenna

32. 6-32 © 2007 Prentice-Hall, Inc LEO and MEO Satellite Systems 3. Small Omnidirectional Transceiver 1. Currently Responsible LEO or MEO 2. Next Responsible LEO or MEO A few thousands of km or miles (Low Earth Orbit) or tens of thousands of km (miles) (Medium Earth Orbit) Closer than GEO, so omnidirectional transceivers can be used User is served by a succession of satellites

33. 6-33 © 2007 Prentice-Hall, Inc How Cellular Works Network of cell sites distributed over a wide area –Radio transceiver –Base station controller –Tower and antennas Mobile telecommunications switching office (MTSO) is a cellular switch that places calls from land-based telephones to wireless customers System identification code (SIC) Controlled channel Phone transmits a registration request MTSO keeps track of the phone’s location in a database

34. 6-34 © 2007 Prentice-Hall, Inc How Cellular Works (Cont’d) MTSO finds you and your phone in the database MTSO picks up frequency that your phone will use in that cell MTSO tells your phone over the control channel which frequencies to use When your phone and the tower switch to those frequencies, the call is connected

35. 6-35 © 2007 Prentice-Hall, Inc Cellular Telephony B E H D I G L K F C M A J N P Handoff O PSTN Mobile Telephone Switching Office 1. Automatic Handoff Between Cellsites O to P as Phone Travels Between Cells

36. 6-36 © 2007 Prentice-Hall, Inc Wireless LAN (WLAN) Uses radio waves to connect laptops and other electronic devices to a LAN Identical to a regular LAN, except that the devices are wireless Wireless network interface card (WNIC) is a card that interfaces between the wireless device and an access point for data or voice transmission and reception Access point (AP) is when a wireless station sends a frame to a server, an access point acts as a bridge that passes the frame over the wired LAN to the server

37. 6-37 © 2007 Prentice-Hall, Inc Typical 802.11 Wireless LAN Operation with Access Points Switch Client PC Server Large Wired LAN Access Point A Access Point B UTPRadio Link Handoff If mobile computer moves to another access point, it switches service to that access point Notebook CSMA/CA+ACK UTP

38. 6-38 © 2007 Prentice-Hall, Inc Typical 802.11 Wireless LAN Operation with Access Points Wireless Notebook NIC Access Point Industry Standard Coffee Cup To Ethernet Switch Antenna (Fan) PC Card Connector

39. 6-39 © 2007 Prentice-Hall, Inc Typical 802.11 Wireless LAN Operation with Access Points D-Link Wireless Access Point

40. 6-40 © 2007 Prentice-Hall, Inc Linksys Switch With Built-In Wireless Access Point Typical 802.11 Wireless LAN Operation with Access Points

41. 6-41 © 2007 Prentice-Hall, Inc Typical 802.11 Wireless LAN Operation with Access Points The Wireless Station sends an 802.11 frame to a server via the access point The access point is a bridge that converts the 802.11 frame into an 802.3 Ethernet frame and sends the frame to the server Mobile Station Access Point Ethernet Switch Server 802.11 Frame 802.3 Frame

42. 6-42 © 2007 Prentice-Hall, Inc 802.11 Wireless LAN Speeds 802.11 2 Mbps (rare) 2.4 GHz band (limited in bandwidth) 802.11b11 Mbps, 2.4 GHz 3 channels/access point 802.11a54 Mbps, 5 GHz (> bandwidth than 2.4 GHz) 11 channels/access point 802.11g54 Mbps, 2.4 GHz limited bandwidth

43. 6-43 © 2007 Prentice-Hall, Inc Ad Hoc 802.11 Networks Ad Hoc Mode –There is no access point. –Stations broadcast to one another directly –Not scalable but can be useful for SOHO use –NICs automatically come up in ad hoc mode

44. 6-44 © 2007 Prentice-Hall, Inc 802.11 Security Attackers can lurk outside your premises –In “war driving,” drive around sniffing out unprotected wireless LANs –In “drive by hacking,” eavesdrop on conversations or mount active attacks. Site with 802.11 WLAN Outside Attacker Doonesbury July 21, 2002

45. 6-45 © 2007 Prentice-Hall, Inc Factors When Considering WLAN Range and coverage Throughput Security and integrity Cost and scalability User costs Standardization of WLANs

46. 6-46 © 2007 Prentice-Hall, Inc Wireless Security Concerns Transmitted message must be protected all the way to its destination host Host system must verify or authenticate the user Wired Equivalent Privacy (WEP) is part of Wi-Fi security mechanism that makes it possible to encrypt messages before heading for their destination –Uses a secret key to encrypt messages –40-bit key is standard but vulnerable –Even the latest 128-bit key is not fully secure

47. 6-47 © 2007 Prentice-Hall, Inc Wireless Application Protocol (WAP) Basis for the mobile Internet Universal standard for positive wireless Internet implementation Adds an Internet protocol layer to the cellular network

48. 6-48 © 2007 Prentice-Hall, Inc Schematic of the WAP Model

49. 6-49 © 2007 Prentice-Hall, Inc WAP Protocol Stack Wireless Application Environment (WAE) WAP element that establishes an interoperable environment to allow operators and service providers to build applications and services for a large variety of wireless platforms. Wireless Session Protocol (WSP) WAP element that decides whether a network and a device will communicate back and forth or whether data will be transmitted straight from a network to the device. Wireless Transaction Protocol (WTP) WAP layer that ensures that data flow from one location to another efficiently based on a request/reply paradigm Wireless Transport Layer Security (WTLS) WAP element that gives security to the system via encryption, data integrity verification, and authentication between the user and the server Wireless Datagram Protocol (WDP) WAP feature that confirms easy adaptation to the WAP technology Network Carrier Method (NCM) A technology that a wireless provider uses

50. 6-50 © 2007 Prentice-Hall, Inc WAP Limitations Small keypad and without a mouse Devices have limited memory Reliability uncertain A period of high latency or delays before making the connections Security issues Legal Issues

51. 6-51 © 2007 Prentice-Hall, Inc Mobile Payments Framework and Examples

52. 6-52 © 2007 Prentice-Hall, Inc Trust Issues Customers have an inherent resistance to sharing personal or private information with technology Trust is a psychological state involving confident positive expectation about another person’s motive with respect to a given exchange or a relationship entailing risk Gaining customer trust in m-commerce can be a daunting process To enhance trust in mobile commerce, security must be designed into the entire mobile system –Enhancing customer familiarity with the company –Building a reputation that suggests certainty and less risk –Providing attractive rewards to attract potential customers –Maintaining company integrity –Strengthening security controls –Use external auditing

53. 6-53 © 2007 Prentice-Hall, Inc Managerial Issues Evaluate corporate needs Evaluate the wireless needs Send out a request for proposal (RFP) Request a demo of the proposed wireless system Install and test the wireless system Train employees Provide ongoing maintenance Most important element is the human staff Best practice to reduce costs is to standardize wireless devices

54. 6-54 © 2007 Prentice-Hall, Inc Implications for Management M-commerce is long on technologies but short on standards M-commerce opens doors to new ways of doing business M-commerce will dominate areas where they have time-based and location-based value Consider cultural and location-based issues Prepare the company to offer mobile services that will be strategically advantageous to the business Experiment with the new m-technology and view the whole effort as an investment in tomorrow’s way of doing business

55. 6-55 © 2007 Prentice-Hall, Inc Chapter Summary M-commerce is the transmission of user data without wires The wireless Web is a technological frontier, open and growing The main benefits are convenience, flexibility, and efficiency with anytime, anywhere access Wireless limitations address distance, speed, and security factors Four critical success factors need to be monitored: mobility, personalization, global standardization, and customer profiling

56. 6-56 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) Bluetooth is a universal, low-cost wireless technology designed for short-range radio hookup for wireless connections among computers, scanners, and printers Key layers of Bluetooth are the radio layer, baseband layer, and link manager protocol The transmitted message must be protected all the way to its destination, and the host system must verify or authenticate the user it is communicating with 2G digital cellular technology expedites vehicles in motion

57. 6-57 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) A cell site contains a radio transceiver and a base station controller Cell sites coordinate the hand off as you move from one cell to another The most common standard for wireless networking is the WLAN To consider WLAN technology, you must consider range and coverage, throughput, security and integrity, cost and stability, and standardization Most WAP benefits are reflected in wireless applications

58. 6-58 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) WAP has the limitations of low-power CPU, small screens with questionable clarity, limited device memory, small keypads and no mouse, questionable connections for reliability, and high latency Companies are beginning to consider the liability issues, as well as managerial issues