1. Opportunities for M-Commerce in the United States University of Illinois * Executive MBA Program March 18, 2002 MC

2. Team Members  Shalini Dewan  Charlie Gantz  Kathy Lockenvitz  Jamey Maxwell  Vish Durga  Jawahar Kaliani  Tom Mahon  Pam Smith-Large  Dr. Michael Shaw – Faculty Advisor MC

3. Overview  Mobile Commerce – Pam Smith-Large  Markets Segments – Tom Mahon  Technology Challenges – Vish Durga  Opportunities – Jamey Maxwell  Advancing M-Commerce – Pam Smith-Large MC

4. M - Commerce  Definition Providing mobile customers and businesses an ability to purchase, track and receive goods and services securely via mobile technology  Value Proposition What are the opportunities for M – Commerce in the United States? MC

5. Market Segments

6. M-Commerce Markets  B2B & B2E Workforce automation Resource tracking e-Mail and voice  B2C e-Commerce, banking, stocks Entertainment, news, info Transactions Health Care  P2P Auctions Email and voice Games & gaming Instant messaging “Napster” Derivatives MC

7. Current Demand  B2B & B2E are current drivers for m-commerce  Leverage business investments in:  Enterprise Resource Planning  Customer Relationship Management  Enterprise Asset Management  Demand for applications  Improve service, productivity & revenue  Utilize the mobile channel  Business willing to invest in mobile technology MC

8. Creating B2C & P2P Demand  Killer application  Price point for entry  Devices $500; monthly subscription $40  Lack of device integration  PDA, internet, radio frequency identification devices (RFID), voice & text messaging  Lack of service integration  Bundle device with content MC

9. Key Enablers  Upgrade infrastructure & standardize  Devices replace existing technology  Replace cell with PDA or combo device  Place embedded devices  New business models  Integrator  Personalized services  Instant or “always-on” connections MC

10. Technology Challenges

11. Current Conditions  Internet access dominated by PC, landlines & broadband  20% of cell phones are web-enabled, only 3% use the web  Addressing text message is cumbersome  Market is dominated by voice traffic MC

12. Device Standards Issues  Competing “form factors”  Phones  PDAs  Laptops MC

13. Telecom Standards Issues  Deregulated markets  Monitored by the Federal Communication Commission  500+ zones allocated to service providers  Network incompatibilities between providers  Absence of nationwide coverage  All features are not transferable to all markets  Internet working standards are an afterthought MC

14. Population Density LocationUsers / sq km Seoul9285 Central Tokyo7049 Metro Tokyo5618 Helsinki1966 Los Angeles352 MC

15. Capital Investment & Revenues  More than 114,000 cell sites  118 million subscribers  $100 B cumulative capital investment  $58 billion annual service revenue  Ave. revenue per user is $45 per month MC CTIA Survey - June 2001

16. Market Size MC VISH please provide new easy to read spreadsheet or graph for this page for your data. Thanks

17. Future Technologies  Networks  WANS, LANS & PANS  Location based services  Telematics  Devices  Functionally integrated devices MC

18. Opportunities

19. Current Money Flow  Revenues generated from multiple service providers  Hardware - device makers  Connection time – telecom providers  Content delivery – ISP  Transactions – eCommerce site MC

20. Challenges  Develop new content  Secure the network  Provide customer privacy  Capture the market  Shorten learning curve  Develop complementary services  Establish end-to-end alliances MC

21. The Road Ahead  Leverage new technologies  Development of new applications  Focus on transaction processing  Attractive pricing packages MC

22. Key Players Network 2G, 2.5G, 3G Wireless satellite Wireless LANS Devices PDAs Cell phones Barcode scanners Laptops RFID devices MC Applications OS/Browser for devices Portal / gateway Transaction security Integrator Partnerships & alliances w/network, application and device providers One point of customer contact

23. Integrator  Mobile User Service Provider (MUSP)  Network value increases as participants increases  Integrate: device + ISP connections + commerce + aggregation  Develop service provider alliances  Critical success factors  Primary customer contact  Revenue stream connectivity MC

24. Application Evolution MC Poor Internet Access Secure the network Provide customer privacy Capture the market Shorten learning curve Develop complementary services Establish end-to-end alliances

25. Advancing M-Commerce

26. Opportunities in M-Commerce  Business will drive market exploitation  Users need someone to bring it all together  MUSP can normalize chaos in market place  Greatest profit derived by MUSP  Strengths of this role  Consumer value added service potential  Eases complicated use of technology  Provides personalization in mobility  Opportunities  Increased communication, services & productivity MC

27. Panel Discussion  Bertlesman M-Commerce Strategy  University of Illinois  Amdocs  CILCO  Lucent Technologies  MRO Software  State Farm Insurance MC

29. The Key Player MC Mobile User Service Provider Partnerships & alliances w/network, application and device providers One point of customer contact Value added relationship management