Mobile Commerce: Beyond E-Commerce Abstract The popularity of m-commerce devices, especially mobile phones among consumers high-lighted a new source of revenue for businesses. An industry review in mobile commerce found a variety of current trends and business models that will affect future strategic uses from a project management perspective. This paper explores m-commerce technology from a business perspective; how it is similar and differs from e-commerce technically; and tries identifying and exploring potential strategic uses for this new technology. Introduction
It is increasingly becoming an understatement to say that the Internet and related technologies are changing the ways we live. Clearly, these technologies will affect peoples’ lives in ways that have yet to be imagined bring. One of the most significant changes promises to be in the way business is conducted. Mobile Commerce, also called m-commerce, is one of these relatively new technologies using mobile internet to conduct commerce. M-commerce has promised to revolutionize online sales and be more powerful than anything the ordinary Internet has offered before.
Up until the last few years, the Internet and telecommunications have followed very separate paths. However, the recently market has begun to see a convergence of these two technologies. Although the commercial impact of wireless communications has thus far been largely limited to consumer mobile phones, the business and technical communities are now anticipating a rapid growth in wireless data services and enhancements for businesses. With all this anticipation, business and IT managers are left trying to figure where best to utilize these technologies.
In this paper we will discuss the differences between e-commerce and m-commerce, some of the main driving forces of mobile commerce’s success, the impact they have on everyday consumers lives, and what they mean for business as a new enabling platform. With this information, we hope to shed new light onto the current state of m-commerce and the future possibilities. The Arrival of M-Commerce, the Awaking of a Mobile Revolution What is a mobile revolution? Over the past two decade, mobile devices have altered the way we live our lives and how we work.
It began with the cellular phone, always being in touch, than SMS text messaging, communicating without having to place a call, finally mobile devices began connecting to the internet and smart-phones are now leveraging connectivity to a whole new level. In a sense, it’s a new form of personal freedom. Mobile devices have brought upon an extension of its user. The advances in wireless telecommunication now allows a person flexibility, enabling a individual to do more, to delegate functions which at one time had been more time consumer to carry out in traditional ways.
Mobile applications now allow a person to exchange stock, order a pizza, watch TV, and pay bills, all while on the move. This equates to a fundamental shift in the perception of connectivity. Mobile devices, particularly mobile phones, allow people, be it individuals or businesses, potentially available 24 hours, 7 days a week. Such connectivity is not only a benefit to consumers, but is also an enormous opportunity for business to connect and have meaningful relations with these consumers.
Why m-commerce is important? As wireless telecommunications technology has advanced, mobile devices, many internet-enabled, have rapidly achieved worldwide penetration; much of this due to the nature of connectivity. Mobile devices change the way people perceive distance; making the world a smaller place. Individuals now have the capability to stay connected with any other individual or business regardless as to where they are in the world. According to Davis (2009), PriceGrabber. om’s March 2009 survey, nearly 58 percent of US online consumers currently owns a mobile phone capable of connecting to the Web. Of the online consumers with Web-enabled phones, 21 percent own a smartphone, 8 percent own an iPhone, and 29 percent own another type of Web-enabled phone. These percentages are expected to continue to grow as new models of phones, such as Google’s Android, proliferate into the market. US Revenues from m-commerce in 2009 were $1. 2 billion up from $396 million in 2008(Maher, 2010), and as consumers become more comfortable with making purchases with hese smartphones, business generated through m-commerce is expected to continue to triple within the next few years(Power,2009). To capture some of this revenue, most wireless mobile providers now offer phones with marketplaces that deliver ringtones, music and customer applications, and major business firms such as Ebay, Macy’s, Scottstrade, and Bank of America have custom applications. These factors make m-commerce a new and important form of business technology that firms need to strategically consider.
M-Commerce: Understanding the fundamentals What is m-commerce? In the past, business typically mass-produced goods and services, selling them through store, catalogue and phone. In the 90’s, the Internet produced a paradigm shift to these marketing strategies; forcing business to reevaluate its own business models and how it communicates its product and services to customers. This diffusion of commerce through the Internet was coined e-commerce, and it unleashed a revolution in buying power.
Today, with the rapid proliferation of the mobile phone market, mobile telephony offers the potential platform for unprecedented penetration of the Internet and services such as m-commerce. According to Buse (2007)M-commerce is defined as “Any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device”( p 33). Simply speaking, m-commerce is any transaction with a monetary value that is conducted over a wireless telecommunication network.
Current mobile Internet applications enable consumers to access a variety of services: Web information search, SMS (text messaging),music downloads, banking, payment, gaming, emailing, chat, weather forecast, GPS navigation, and so forth. E-Commerce and the current migration to M-Commerce To understand how m-commerce got started, you have to look at the beginnings of electronic commerce. It is common knowledge that the Internet found its feet in the 1960’s. What is not commonly known is the parallel development of e-commerce that accompanied the first internet inception.
It was very rudimentary but the earliest implementations of the internet were computer networks which were used to conduct basic electronic transactions. Using Electronic Data Interchange (EDI), a company’s computer system could share business documents such as invoices, order forms, shipping confirmation with another’s computer. To start with, companies had standards of their own to format their output and deliverables. Through the years, e-commerce has evolved through the adoption of TCP/IP as the internet standard and a host of larger investors, as well as developments in internet security.
The addition of Tim Berners-Lee’s theoretical hypertext-based web of information that a user could navigate using a simple interface called a browser made real, this opened the door for the next level. Coupled with this was a lifting of a National Science Foundation ban on commercial businesses operating over the Internet, in 1991. This set the stage for Web-based e-commerce through standardized browser interfaces, security, and the provision of a stabile platform. As e-commerce emerged, it grew in scope and progress, but there was one problem with in the implementation.
E-commerce was tethered to a large computer interface, requiring a standard system, complete with keyboard and mouse. This was good, but the growth in computer usage was matched if not exceeded by the explosive growth in mobile phones and mobile internet capable devices. Though these devices have unique problems that need to be overcome, they do present a lucrative, untapped market for business to exploit. With large populations of consumers equipped with cell phones or other mobile devices almost 24hrs, a viable technology was needed that could meet both their needs.
Thus, this led to development of m-commerce as we see it today. The distinctions between “M” and “E” commerce Sometimes referred as the next-generation e-commerce (Seiffert, 2008), m-commerce is to some extent a natural extension of e-commerce as they share fundamental business principles. This is the case since they involve much of the same functionality in terms of assisting electronic business over the Internet. Yet, m-commerce is not always, strictly speaking, traditional e-commerce. Though they both are computer-assisted and net-work-enabled, they both posses unique characteristic defined by use and functionality.
The most substantial distinction between e-commerce and m-commerce are the devices they reside on. E-commerce is generally conducted on the PC, where as m-commerce takes place on smart-phones, PDA’s and tablets. These devices are mobile, hence the “m” in m-commerce. M-commerce as a technology is unique; it represent the convergence of two key technology trends of the 1990s: portability and networking. This enables users to access products and services on the go, without “plugging in” to the Internet or having to visit a traditional brick and mortar storefront.
Mobile device convenience and portability open the door to a slew of new applications and services. They follow you wherever you go, making it possible by the use of a smart-phone to have most of the features of a home computer. Users can constantly update their personal status with friends and colleges, receive live street by street navigation, the ability to download music on the fly, reading the news, take pictures and upload them to a blog, or even receive SMS event alerts from a favorite entertainment lounge. There are other important distinctions between the two technologies.
The operating systems are substantially different, mobile devices use IPhone OS, Symbian, PalmOS, Android, Java, and Windows Mobile, whereas PCs run Windows, Linux or Unix. Another distinction is functionality. Mobile phones in particular impose special constraints such as small screen-size; thus makes browsing e-commerce sites sometime impractical. Yet, at the same time newer smart-phones offer unique feature sets such as touch-screen and motion sensing that enhances experience and usability, and paves the way for new forms of application opportunities.
As such, M-commerce should be recognized as a unique business opportunity with its own unique characteristics and functions, not just an extension of an organization’s Internet-based e-commerce channel. For business and IT managers, the major importance to business is how they affect their position from a strategic point of view and understanding how best to utilize these technologies. Due to the device hardware limitations, managers need to recognize that the technologies are complementary, yet serve business and customer in two different ways.
For example strategically, managers need to understand as what, who and how m-commerce satisfies a need. What is being satisfied? Over the past two decade, mobile devices have altered the way we live our lives and how we work. They have become synonymous with modern life and fulfill our need to be connected no matter where we are in the world. This proliferation of connectedness began with the cellular phone, always being in touch; next with SMS text messaging, communicating without having to place a call; and finally mobile devices began connecting to the internet and are now leveraging connectivity to a whole new level.
In a sense, mobile devices provide for a new form of personal freedom, they have brought upon an extension of its user. The advances in wireless telecommunication now allows a person or business flexibility, enabling a them to do more by delegating functions which at one time had been time consumer to carry out in traditional ways. Mobile applications now allow a person to exchange stock, order a pizza, watch TV, and pay bills, all while on the move. This equates to a fundamental shift in the perception of empowerment, connectivity has become ubiquitous.
Mobile devices, particularly mobile phones, allow people, be it individuals or businesses, to be potentially available 24 hours, 7 days a week. Such connectivity is not only meaningful to consumers, but it is also an enormous opportunity for business to connect and have valuable relations with consumers through m-commerce. Who is being satisfied? Individuals who want personalization, have a need stay up-to-date and connected, enjoys ready on-demand downloads and location specific features, and likes the convenience of handy portable applications and services.
How are customers being satisfied? M-commerce as a technology is unique; it represent the convergence of two key technology trends of the 1990s: portability and networking. This enables users to access products and services on the go, without “plugging in” to the Internet, or having to visit a traditional brick and mortar storefront. Mobile device convenience and portability open the door to a slew of new applications and services for consumers and other businesses. They follow you wherever you go, making it possible by the use of a smart-phone to have most of the features of a home computer.
Current mobile Internet applications enable consumers to access a variety of services: Web information search, SMS (text messaging),movie downloads, banking, payment, gaming, emailing, chat, weather forecast, GPS navigation, and so forth. Users can constantly update their personal status with friends and colleges, receive live street by street navigation, download music on the fly, read the news, take pictures and upload them to a blog, or even receive SMS event alerts from a favorite entertainment venue. Transactional payments that enable m-commerce are made by: Charging to the mobile telephone user’s bill. * Deducting from their calling credit. * Billing a customer’s credit card through a secure user interface. Current trends and emerging markets It would appear that for now, the hottest trends in M-commerce consist of low end purchases. M-commerce also has a lot of opportunities in location based sales. This is delivering information on items available for purchase, when you are in close proximity to that item of purchase. Building off of this, one of the most interesting turns is mobile advertising, which is allowing access to interactive content.
In fact, mobile marketing is doing very well. While global mobile ad revenue in 2009 was an estimated $914. 5 million, the real growth is not expected to come into play until 2011. (Perez, 2009) By 2013, it is expected the mobile ad market to surpass $13 billion. This is not only due to enhanced use of mobile devices, but also due to further growth in bandwidth availability. Where the customers go, so go the advertisers and in turn it should lead to enhanced consumerism and so on. Other purchases, such as tickets, can be sent to mobile phones using a variety of technologies.
Imagine being able to hold out your phone or app and having it scanned like a ticket, or being able to generate tickets from a kiosk when near. These tickets would be usable immediately when presented at an event. One could connect to a mobile agent or directly to the source to purchase the tickets either in advance or on the spot. As demonstrated in the graphic, movie and event tickets represent a good area for further growth in mobile commerce. Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones, wallpapers, and games for mobile phones.
The convergence of mobile phones, mp3 players and video players into a single device will result in an increase in the purchase and delivery of full-length music tracks and video. Download speed, as they increase due to implementation of newer technologies such as 4G , will make it possible to buy a movie on a mobile device in a couple of seconds while on the go. A key part of this m-commerce experience, which is not found with newspapers or other content delivery systems, is knowledge by the device and marketer of the location of the consumer during the transactions.
Knowing the location of the user allows for location based services to place advertising and information at ones fingertips based on higher location context. This will allow travelers to find the right product even in a unknown city or location. Retailers will also be able to track customers at all times and notify them of discounts at local stores that the customer would be interested in. A consumer not only gets targeted sales information, but that sales information is coupled with the consumer’s location to garner optimal results.
This method not only works for existing sales, but encourages new sales as well. With m-commerce to expanding into everything from services to marketing and advertisement, finding out what a user wants and encouraging the sale when the user is near it appears to be the next stage. While the some fields adapt themselves more to this current trend than others, there could be the possibility for m-commerce in some of the most unusual places. There are other theoretical markets as well. One of those markets, of all places, is construction. Case Study: A Emerging Trend of M-Commerce in Construction
Since m-commerce provides not only communications functions, but information, education, and business needs, m-commerce could potentially lend itself to the field of construction as well. M-commerce and the integration of mobile devices promises to add enhanced security, safety, dollar savings and knowledge sharing to the construction field in the years ahead. While the 4G networks do not enjoy widespread implementation as of the writing of this document, the data transfer rate is significantly higher with stationary or slow moving objects than with fast moving objects (Grami, 2004. Construction sites could be seen as a stationary object with many smaller, slower moving objects around them. That is, the onsite workers. The current state of construction usually has all employees fitted with some manner of PTT (push to talk) device. These same mobile devices could have an interface that allows an employee to “check in” when on site, which in turn begins the billing of the customer. This in turn allows an employer to know where his employees are, since location determination is seen to be an indispensible feature of mobile commerce (Grami, 2004. The customer would not be interested in a specific employee on site, but would want to make sure there was one supervisor and four man crew working on a project for the specified time. Customer needs With the tight integration of GPS in most mobile devices, this empowers customers who traditionally work with contractors and large teams. The customer can track who is on and off site, and pay based on hours performed on site. Employers can get hours submitted directly from mobile devices, allowing for immediate and accurate billing of hours.
Security From the employer standpoint, mobile devices can also be equipped with unique security systems such as RFID (radio frequency identification. ) Passive RFID, which are devices that are powered by the device searching for them can be used with local sensors to allow access to areas of a job site. Active RFID, which are powered RFID tags that allow themselves to be read at a greater distance than passive RFID devices, could be used on mobile devices to make sure that employees maintain their distance from environmental hazards.
Stakes hosting passive RFID tags could be set around hazards and employees with powered RFID on their mobile devices could be cautioned away from the hazards by an alert on their device. This could in turn notify their employer that they are potential violation of a safety rule, leading to disciplinary action or further employee training and development. An important feature of mobile devices could also be their presence signifies an individual belonging on site. Not the mobile device itself, but the data and imprints it holds. This mobile device can be equipped with a smart security system allowing egress to parts of the construction site.
They would serve as virtual keys/secure ID cards to verify they have access to hazardous or sensitive locations on site. To improve safety, mobile devices can be outfitted with adaptive modulation and coding (AMC) which allows a group of employees to combat wireless channel degradation. This would enhance communication between employees, allows for safer processes and enhance knowledge management onsite. It would also provide for video-mails or video conferencing allowing training on site and reviews of the day’s activities to a dispersed staff.
There are also OSHA regulations that must be observed that would allow someone offsite to make sure that regulations are followed and provide repudiation of proper staffing levels. The mobile devices could verify the age of the crane operator, verify all employees on site have received the proper training, host a library of training videos to get employees up to speed, and allow for digital signatures demonstrating that the trained acknowledge what they viewed and will comply to the best of their abilities. There is also development in applications that are expected to be a part of the next mobile device that can enhance safety.
There is work currently underway for mobile devices that are able to detect the current external temperature, the humidity, and overall air quality (Raftery, 2009. ) These developments could enhance an employee’s safety by allowing their role to evolve as work conditions become more or less optimal. They could also alert an employer to potential hazards that the employee is ignoring, such as local hazards or working in zones marked unsafe, or hazards the employee would not be aware of, such as the air quality.
New areas are designated unsafe from time to time and cannot always be conveyed to all trades. Alerts would allow areas to be designated hazard zones in a more evolutionary fashion, allowing for less downtime for field employees, resulting in a workforce that is more adaptive and responsive to dynamic changes in the environment. While it may be premature to declare that the m-commerce revolution has arrived for construction, it should be a safe bet to state that m-commerce and mobile devices will work together to transform most industries who currently rely on basic t-commerce features.
M-commerce not only can facilitate billing and payment for things purchased over mobile devices, but can be used as a valuable tool to bill the efforts of human resources as well. Dominate Economic Characteristics As wireless telecommunications technology has advanced, mobile devices, many internet-enabled, have rapidly achieved worldwide penetration. Much of this growth is due to the need of personal connectivity. Mobile devices themselves have changed the way people perceive distance; making the world appear as if a smaller place.
Individuals now have the capability to stay connected with any other individual or business regardless as to where they are in the world. According to Davis (2009), PriceGrabber. com’s March 2009 survey asserted nearly 58 percent of US online consumers currently owns a mobile phone capable of connecting to the Web. Of the online consumers with Web-enabled phones, 21 percent own a smartphone, 8 percent own an iPhone, and 29 percent own another type of Web-enabled phone. These percentages are expected to continue to grow as new models of phones, such as Google’s Android, proliferate into the market.
US Revenues from m-commerce in 2009 were $1. 2 billion, up from $396 million in 2008(Maher, 2010). And as consumers become more comfortable with making purchases with these smartphones, business generated through m-commerce is expected to continue to triple within the next few years(Power,2009), (Garner Inc, 2010). To capture some of this revenue, most wireless mobile providers now offer phones with portals that deliver ringtones, music and applications. Major business firms such as Ebay, Macy’s, Scottstrade, and Bank of America all have custom service applications that can be found too.
The number of m-commerce providers, including mobile operators and mCSPs, are in the hundreds. Between Apple’s App Store and Google’s Marketplace alone, over 180,000 applications are offered by mCSPs, and these mobile applications are becoming very popular. As an excellent statistic of this popularity, Apple announce on March 20th, 2010 that consumer have downloaded over 3 billion apps from its mobile App Store since its inception in 2008. As for vertical integration, there is little with-in the industry. Strategic, cooperative partnerships between wireless operators, OS designers and handset manufactures tend to be the standard model.
Taken into consideration all these factors, m-commerce appears to have begun to mature into a new and important form of business technology that firms need to strategically consider. Discussing the Major Forces Driving M-Commerce Adoption Technology Innovation Mobile phones, developed primarily as communication devices, have evolved beyond just voice talk. New wireless phones are being marketed as portable entertainment centers and electronic tools for business and personal use—with voice communications as a low-visibility, taken-for-granted feature.
Smartphones now offer greater value to subscribers, allowing them to listen to music, take photos, browse the internet, download applications, and receive text and email; all on a single, compact device that can fit into a user’s pocket. Many of these capabilities are due hi-tech innovation in design of the devices themselves, but also to technological innovations in the mobile network infrastructure. As mobile operators moved from 2G to 3G, so did the data speed and device capability. Now telecommunication operators are on the upgrading to even faster LTE and 4G networks capable of broadband speeds.
It is innovations in networks and smart phones that are perpetuating m-commerce adoption. At one time smartphones were just a business tool, but today more consumers than ever are using powerful devices to enhance their lives. According to Ouick (2009) “ In the past year alone, the total number of smartphones subscribers increased 72% quarter-over-quarter, growing from 15 million subscribers in Q2 2008 to 26 million in Q2 2009. ” The number of smartphones are growing faster than the number of low-end cell phones and landline phones.
Because of these trends, you can expect wireless m-commerce to eventually surpass traditional “plug in” e-commerce. User Adoption and Active Customer Demand One of the main driving forces behind m-commerce is the rapid mobile phone adoption. In 2009, it was estimated that mobile penetration in the US is 235 million people (EMarketer, 2009). To make sense of this number, that mean approximately 76. 5% or roughly ? of the US’s population currently carries a mobile phone. EMarketer (2009) also expects this number to continue to rise, reaching 255. million, or 80% penetration, by 2013. Along with the need for basic verbal communication services, individual’s lifestyles are changing and these consumers are beginning to demand much more from their mobile phones. On average, mobile phones are now replaced every 18 months (Semiconductor Industry Association, 2006). Along with these replacements come upgrades and new premium features such as download marketplace. Consumers now expect their phones to be multi-task. They expect to use them to communicate with others, through voice and text messaging.
They expect to use them as a connective device; accessing email and the internet. They expect them as a multimedia device; camera, mp3 player, calendar, and alarm clock. They expect to use them as a transactional device; using them make purchases, exchange stock, and to make payments. They expect to use them as intelligent devices; navigation, weather and traffic alerts, and contextual locator. Given all these consumer expectations, and such a huge install base with ready access to products and services with-in their hand, is a golden business opportunity that applicable commerce cannot ignore.
Value Chain Partnerships Well before the introduction of m-commerce, the rapid adoption of personal computers and greater accessibility of Internet infrastructure had already fuelled immense growth in the digitization of products and services. In this new digital economy, consumer online services demand that diverse inputs must be combined to create and deliver value. No single industry alone has what it takes to establish the online digital economy; success requires inputs from diverse industries that have only been peripherally related in the past .
As a result, co-operation, collaboration and consolidation have become the norm, as arrangements are struck between companies in complementary industries. Noticeably, companies in telecommunications, computer hardware and software, entertainment, creative content, news distribution and financial services have seized opportunities by aligning competencies and assets. It’s the partnerships in the mobile device supply chain are a major contributing factor that is driving innovations. For example device ; OS designer Apple, partnered up with telecom giant AT;T to market the iPhone.
New entrant Google, partnered with several handset manufactures and network operators, such as Motorola, HTC, Verizon and T-Mobile, to bring its Android phone OS to the marketplace. These new handsets have brought a revolution to the mobile phone industry, inventing the “killer app” that m-commerce had needed. They’ve changed the way consumers view and use their mobile device, and created a new avenue for commerce to be conducted. Besides expanding usability through touch screen, the biggest innovation that is having an impact is the application marketplace that gives content providers a “virtual” store front.
It is this new “virtual” store that gives established business and new start-ups, a unique way to connect with consumers to generate revenue. In 2010 it is expected that 4. 5 billion applications will be downloaded on to smartphones through these “virtual” stores worth $7 billion (Garner Inc, 2010). The research Garner Inc expects this number to balloon to nearly $30 billion by 2013. All of this considered transactional through m-commerce, and is dependent on the critical partnerships of everyone involved in the supply chain. According to Stuart J. Barnal, there are six components to a m-commerce value chain.
These can be categories into two sections Content and Infrastructure ; Services; and are the following: * Mobile Transport – This is the basic network involved in communications, including transportation, transmission and switching for voice and data. * Mobile Services and Delivery Support – This involves, for example, the infrastructure in connecting to the Internet, security, the server platform, and payment systems. * Mobile Interfaces and applications – This process centers on integrating the infrastructure and systems with users hardware, software and communications. Content Creation – The focus in this value space is on creating digital material such as audio, video and textual information. * Content Packaging – Digitising, formatting, editing, customising, and the use of software to combine and package content. * Market Making – Marketing and selling content is the primary role of mobile portals; includes programming development, service delivery and customer care. The success of m-commerce is based on a synergy of three driving forces: technological innovation, consumer adoption, and successful partnerships.
Innovative mobile solutions rely on many different partnerships that make up the supply chain. Improvements in mobile phone functionality create meaningful value for consumers, which in turn drive demand. This demand if successfully managed will bring profits to all partners, which drives further innovations and demands that will contribute to the dispersion of m-commerce. Strategic Uses of a Mobile Platform At the end of the1990’s, technology evangelists were predicting an arrival of a mobile commerce revolution that would change the 21st economy.
Rarely had a new area of business been heralded with such enthusiasm by business leaders, yet by 2002-2003 this revolution had yet to materialize and industry pundits we claiming an “m-plosion” of the industry (Luna, 2004). In the article The M-Commerce M-Plosion: Is There Still Hope? (2002), Luna says m-commerce failed because of bad usability, slow network performance, inadequate interfaces, security concerns, and a failure to coordinate activities between value chain. To sum this up, the failure was a result of poor execution and lack of a cohesive business strategy.
Today, the situation has fortunately changed due to a maturation of wireless communication technologies and devices. This has allowed business to develop improved business models and strategies that capitalize on the strength of mobile commerce, thereby helping business to compete in a today’s digital marketplace. The biggest challenge to building an m-commerce strategy is understanding how best to utilize the technology in ways that are meaningful to the end user, while at the same time producing value to the organization.
Many of the issues plaguing the introduction of m-commerce were due to poor strategic planning, and a misunderstanding of technology capability and application need. According to Senn (2008) M-commerce applications fall into three main categories: transaction management, digital content delivery, and telemetry services. Understanding which of these categories a business want to market in is crucial to a strategic plan. Developing a viable product or service also requires the product or service to have all critical success factors.
Xu (2008, p231), identifies 5 critical success factors for building a feasible e-commerce product or service. These are factors are: product fit, functionality, usability, pricing, and customer security. Product fit is inventing a product that fulfills a market need; functionality is ensuring the proper functionality and works as it should, usability is making a product powerful yet easy to use; pricing is matching the meaningful product with a consumer worthy price point with a fair profit return; and customer security regards designing a product that provide security and trust for handling valuable consumer data.
Incorporating all of these factors into an innovative product solution will help an organization to build more viable product and a strategic advantage in the marketplace. The opportunity and challenge is for business to develop strategies that capitalize on the strengths of mobile commerce, thereby helping it to compete in an increasingly digital marketplace. Technologies, Services, and Business Models The technology of m-commerce is fast becoming the major problem to large scale adoption. Mobile devices might be excellent ways to talk to each other on the phone, but have limited availability of memory, processing power, and storage space.
While in 2000 it was expected that Microsoft Mobile or a smaller scale version of Unix would be the software of choice for the mobile platform, no one could see the growth of Java as the de facto standard. In addition, another limiting factor is the lack of a perfect development business model. While some models are being offered by manufacturers, one size does not fit all. Different industries need different approaches to garner the revenue, but how can one arrive at a standard in such a new territory?
Fortunately, there are several ways already available for stratification of m-commerce markets, which in turn has aided in setting up m-commerce business models. In addition, different methods of access have dictated the type interface to use. Even further, some methods blur the lines between business models. When deciding by market, the information services model, the trade services model, and the communication services model have been used. (Nui, 2008) The trade services model includes information of product and orders between enterprises and their customers.
Companies that participate in trade type services should spend their time working on a model of business that mirrors businesses that are in the same similar industry or category. Companies such as Amazon, e-Bay, and CDW may all be examples of the trade services model. The communications model includes mobile applications while additionally adding m-email, and m-conference. Different types of access also dictate the type of business model companies have adopted. Most of these are divided by the voice access’s access, however.
Mobile devices that use WAP access, SMS access, or PUSH Mail may all have models that similarly reflect the mobile voice topology. Companies like Yahoo, Google, and MSN all have features that are similar to the communications model. In the information services model, it encompasses stock market information, inventory management, and general enterprise information. A stock ticker on the mobile device, or an inventory management system would be an example of the information services model. This may be a business such as UPS, FedEx, or a third party data management firm.
While not every business may fall into one of these three categories, they provide a framework for future mobile commerce growth. In addition, they provide a point of positioning ones company in the m-commerce milieu, and aid in a customized logical approach to sales. Managing the Challenges and issues Some of the challenges to m-commerce are also some of the things that make m-commerce so appealing. The small screen, the low connection and battery life, the low input and output ability of the devices. In addition, the problems brought about by signal strength and limited software capabilities on mobile devices are major factors.
The initial cell phone was not designed with m-commerce in mind. There is work afoot to resolve these issues, but there is a balance: how does a m-commerce provider balance mobility with functionality? Through a structured review of the problems faced, some changes have already been implemented. This has been addressed by lumping together the issues faced into four groups. The first group is mobile device characteristics. This is battery life, screen size, keyboards, keypads, touch-screens, styluses, buttons, microphones, memory, feedback and processing ability.
The benchmark being e-commerce on a regular desktop, how can a company generate the same level of functionality using only a small interface with limited resources? While this may seem insurmountable, Apple and other vendors are working on offerings. Devices such as the Apple iPad and Amazon’s Kindle are just now beginning to give users the flexibility of the desktop with the lightweight mobility of a mobile device. The second group is web characteristics. That is, the interface outside the mobile device that will be the first line the user sees. This is the browse style and depth of information delivered with the limited mobile device.
There has been a lot of work to standardize the platform for mobile devices, and while there is currently no clear standard, there is heavy work being done by Microsoft and Sun with the Windows Mobile and Java platforms respectively to find a secure, stabile and scalable solution for end users needs. The third group is the wireless communication characteristics. This is the foundation of our communication and mobile device, and plays heavily into the success of a m-commerce strategy. The data transmission speed, the availability of a wireless signal and stability all enter into the equation.
While we are currently in a 2G and 3G world, the 4G world looks a lot more impressive and conducive to m-commerce. Enhanced transmissions speeds gain one multilayered security, enhanced multimedia content, dynamic security and inventory updates, and a greater ability to deliver up to date information for online purchases and recommendations based on present purchases. The last group is context. This is the personal environment that one finds oneself in when conducting m-commerce. An application designed to recommend the closest restaurant to a user on a subway or walking down the street may ave a lot different context than an e-commerce application that produces the same result. The design of the entire experience must be different if the application is to take hold. (Nui, 2008) Context will be continually enhanced by progressive work on the other three categories of device, web and wireless characteristics. As these categories progress, the personal environment will be elevated, but it cannot be elevated on its own. This will be a continual process, much like technology changes in gas mileage enhance most new vehicles, technology growth and changes will enhance mobile devices context. Future Prospects
What future opportunities does mobile commerce offer? Doubtless, in the last few years m-commerce has begun to hit its stride. Massive investments in mobile communications have stimulated competition. With the advent of more powerful smart phones, the line between handheld and pc have begun to blur. Today, many of the problems that beset past adoption – slow data network, inadequate processor speeds, small screens, poor device interfaces – have been addressed. GHz processors with integrated GPU’s, multi-touch screen interfaces, and 3G networks now provide the needed flexibility for mobile operators to offer engaging products and services.
As consumers adoptions continue to grow, interest of the content providers to grab a share in the market through mobile technology will bring enhancements to m-commerce. Tomorrow’s future technologies hold even more prospective business opportunities. Three of the most promising future technologies are LTE/4G data networks, embedded NFC tags in mobile phones, and portable tablet devices. LTE/4G Data networks are the fourth generation of wireless technology. It is expected to bring a fundamental change in the way wireless communication network operate, and promise to bring improved wireless network connectivity.
To mobile operators, this technology is expected to provide a comprehensive and secure all-IP based solution where facilities such as IP telephony, ultra-broadband Internet access, gaming services and streamed multimedia may be provided to users. To user, this means improve service quality, less dropped calls, faster download speeds, and more powerful software with enhanced functionality. Near Field Communication or NFC, is a short-range high frequency wireless communication technology which enables the exchange of data between mobile devices over about a 4 inch distance.
This operates by an embedded chip within a mobile device which than can connect with a NFC chips and proximity readers. This technology will open the door for whole new host of m-commerce applications, these include: mobile payments, paperless coupons, smart posters and advertisements and mobile ticketing. The newest of the mobile devices that are expected to be the next big consumer device and a driver of m-commerce are portable tablet device. These devices, which act between a laptop and a mobile device, are to offer WiFi connectivity and be 3G network enabled.
The most hyped, and soon be released, is the Apple iPad, which along with the iPhone, is expected to create new avenues for m-commerce. Along with Apple, Microsoft is developing its own called the courier, and Dell is preparing to launch its own device using Google’s Android mobile operating system. Each of these is to include internet browsers and dedicated marketplaces for end user applications, music, movies and media, such as books and newspapers. Conclusions As m-commerce applications and wireless devices are evolving rapidly, one will take forward the other one towards empowering innovation, versatility and power in them.
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