A PRESENTATION ON:

MOBILE-COMMERCE
SUBJECT: CS 782

SUBMITTED BY
ABDUS SAMAD MOLLAH
YEAR: 4TH
ROLL NO.: 100
UNIVERSITY ROLL NO.:
071090101102
DEPARTMENT OF COMPUTER
SCIENCE & ENGINEERING

1
 NETAJI SUBHAS ENGINEERING
COLLEGE
ACKNOWLEDGEMENT

I would like to express my gratitude to Prof. whose

guidance, feedback and long deliberation enabled me to
complete this project successfully.

During this project I was helped in all aspects by

I would also like to thank all the respected faculty
members & of.

Lastly I am thankful to my parents and my friends whose

co-operation helped me to complete the project.

Abdus Samad Mollah

2
 CONTENTS
Topic
Page No
 ABSTRACT
4

 INTRODUCTION
5-6

 WHAT IS M-COMMERCE?
7

 HISTORY OF MOBILE COMMERCE

8-9

 M-COMMERCE FROM THE CUSTOMERS’ & THE

PROVIDERS’ POINT OF VIEW---TWO SIDES OF THE
SAME COIN 10

 ATTRIBUTES OF M-COMMERCE
11

 WIRELESS TELECOMMUNICATIONS TECHNOLOGY

ROADMAP 12-14

 WIRELESS MESSAGING DEVELOPMENTS

15

 WIRELESS APPLICATION PROTOCOL (WAP)

16-17

3
  WAP ARCHITECTURE
18

 MOBILE COMPUTING INFRASTRUCTURE

19-20

 THE M-COMMERCE VALUE CHAIN

21-22

 APPLICATIONS OF MOBILE-COMMERCE
23-30

 M-COMMERCE REVENUES
31-32

 A FEW MORE STATISTICS

33

 ISSUES IN M-COMMERCE
34-36

 CONCLUSION
37-41

 REFERENCES
42

ABSTRACT
M-commerce (mobile commerce) is the buying and selling of goods and services
through wireless handheld devices such as cellular telephone and personal digital
assistants (PDAs). Known as next-generation e-commerce, m-commerce enables users
to access the Internet without needing to find a place to plug in. The emerging
technology behind m-commerce, which is based on the Wireless Application Protocol
(WAP), has made far greater strides in Europe, where mobile devices equipped with
Web-ready micro-browsers are much more common than in the United States.

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In order to exploit the m-commerce market potential, handset manufacturers such as
Nokia, Ericsson, Motorola, and Qualcomm are working with carriers such as AT&T
Wireless and Sprint to develop WAP-enabled smart phones, the industry’s answer to
the Swiss Army Knife, and ways to reach them. Using Bluetooth technology, smart
phones offer fax, e-mail, and phone capabilities all in one, paving the way for m-
commerce to be accepted by an increasingly mobile workforce.

As content delivery over wireless devices becomes faster, more secure, and scalable,
there is wide speculation that m-commerce will surpass wireline e-commerce as the
method of choice for digital commerce transactions. The industries affected by m-
commerce include:

* Financial services, which includes mobile banking (when customers use their
handheld devices to access their accounts and pay their bills) as well as brokerage
services, in which stock quotes can be displayed and trading conducted from the same
handheld device

* Telecommunications, in which service changes, bill payment and account reviews can
all be conducted from the same handheld device

* Service/retail, as consumers are given the ability to place and pay for orders on-the-fly

* Information services, which include the delivery of financial news, sports figures and
traffic updates to a single mobile device

IBM and other companies are experimenting with speech recognition software as a way
to ensure security for m-commerce transactions.

INTRODUCTION

THE WWW & E-COMMERCE

The advent of the World Wide Web (WWW) in the early 1990s
provided the interface that made the Internet easily accessible to
the mass market, sparking the information revolution---

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participants came to have unprecedented access to a deluge of
data and information.

Riding on the ubiquity and reach of the WWW is commerce in its

many forms: Inter-business trade, intra-organizational
transaction, purveyors of goods and services touting wares to
potential customers and consumers soliciting purchases.

The combination of the Internet as a business data clearinghouse,

and the WWW as the virtual global marketplace, transformed
traditional commerce to electronic commerce (e-commerce) . E-
commerce is the primary propellant of Internet development
today and will continue to drive innovation well into the new
millennium.

Electronic commerce has attracted significant attention in the last

few years. This high profile attention has resulted in significant
progress towards strategies, requirements, and development of
e-commerce applications . The growth forecast for both business-
to-consumer (B2C) and business-to business(B2B) aspects of e-
commerce over the next few years is phenomenal by any
standard. One point that should be made here is that nearly all e-
commerce applications envisioned and developed so far assume
fixed or stationary users with wired infrastructure, such as a
browser on a PC connected to the Internet using phone lines or a
Local Area Network (LAN).

FROM E-COMMERCE TO M-COMMERCE

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Extraordinary market statistics are emerging from a related field:
wireless telecommunication. Conceived in the 1980s primarily to
carry voice transmissions, the medium today has developed into
a fair bearer of data-including Internet communications. Wireless
and mobile networks have experienced exponential growth in
terms of capabilities of mobile devices, middleware development,
standards and network implementation, and user acceptance .
Currently, more than 800 million cell phones and other mobile
devices are in use worldwide, and out of those, more than 140
million users are in US alone. The worldwide numbers are
projected to rise to 1 billion soon, thereby exceeding the
combined total of all computing devices several fold. In addition,
areas around the world where wired penetration is relatively
lower, mobile phones have actually become many subscribers’
primary means of Internet access. Countries with a lack of
regular telecom infrastructure are likely to adopt wireless and
mobile communications to serve both urban and rural areas.

Untethered by the umbilical cord of fixed line connection, the

amazing possibilities of wireless Internet access fuels the
unstoppable trend towards ultimate convergence of Internet and
mobile communications. In the process, e-commerce evolves into
mobile-commerce or m-commerce.

It is envisioned that many new e-commerce applications will be

possible and significantly benefit from emerging wireless and
mobile networks. These applications have been termed as
“wireless e-commerce” or “mobile commerce”.

M-commerce is more than just an extension of e-commerce in

conducting conventional business----the allure of ‘anytime’
convenience and ‘anywhere’ mobility in carrying out everyday
Internet transactions has the potential to spur a myriad of novel
and unique services.

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 WHAT IS M-COMMERCE?

• Any electronic transaction or information interaction

conducted using a mobile device and mobile
networks (wireless or switched public network) that
leads to transfer of real or perceived value in
exchange for information, services or goods, is
known as Mobile Commerce.

• Mobile Commerce, also known as M-Commerce or

mCommerce, is the ability to conduct commerce
using a mobile device, such as a mobile phone, a
PDA (personal digital assistant), a smartphone, or
other emerging mobile equipment such as dashtop
mobile devices.

• Mobile Commerce has been defined as follows:

“Mobile Commerce is 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.”

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 HISTORY OF MOBILE-
COMMERCE

• 1997: Mobile commerce was born when the first two

mobile-phone enabled Coca Cola vending machines were
installed in the Helsinki area in Finland. The machines
accepted payment via SMS text messages.

• 1997: The first mobile phone-based banking service was

launched by Merita Bank of Finland, also using SMS.

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• 1998: The first sales of digital content as downloads to
mobile phones were made possible when the first
commercial downloadable ringtones were launched in
Finland by Radiolinja (now part of Elisa Oyj).
• 1999: Two major national commercial platforms for mobile
commerce were launched: Smart Money
(http://smart.com.ph/money/) in the Philippines, and NTT
DoCoMo’s i-Mode Internet service in Japan.

i-Mode offered a revolutionary revenue-sharing plan where

NTT DoCoMo kept 9% of the fee users payed for content,
and returned 91% to the content owner.

• 2000: Mobile-commerce-related services spread rapidly .

 Norway launched mobile parking payments.

 Austria offered train ticketing via mobile device.
 Japan offered mobile purchases of airline tickets.

• 2001: The first conference dedicated to mobile commerce

was held in London in July.
• 2002: The first book to cover mobile commerce was Tomi
Ahonen’s

M-profits.

• 2003: The first university short course to discuss mobile

commerce was held at the University of Oxford with
Tomi Ahonen and Steve Jones lecturing.

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• 2008: UCL Computer Science and Peter Bentley ran
dedicated courses in mobile commerce.

M-commerce from the customers’

& the providers’ point of view---
TWO SIDES OF THE SAME COIN

Customers‘ point of view

• The customer wants to access information, goods and
services any time and in any place on his mobile device.

• He can use his mobile device to purchase tickets for events

or public transport, pay for parking, download content and
even order books and CDs.

• He should be offered appropriate payment methods. They

can range from secure mobile micropayment to service
subscriptions.

Providers‘ point of view

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• The future development of the mobile telecommunication
sector is heading more and more towards value-added
services. Analysts forecast that soon half of mobile
operators‘ revenue will be earned through mobile
commerce.

• Consequently operators as well as third party providers will

focus on value-added-services. To enable mobile services,
providers with expertise on different sectors will have to
cooperate.

• Innovative service scenarios will be needed that meet the

customer’s expectations and business models that satisfy all
partners involved.

ATTRIBUTES OF M-COMMERCE
• M-Commerce is an enabling technology for delivering
greater business volume, customer loyalty, and support for
urgent transactions such as travel changes and stock
transactions.

• M-Commerce applications won’t work if they simply mirror

the e-commerce applications that are available on web sites.
They must offer the correct format for a specific device, plus
secure access and intuitive navigation.

• M-Commerce must be treated as a unique opportunity for

delivering personalized, location based services to
customers, and not simply as an extension to company’s
web presence.

The attributes of mobile-commerce are:

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 • Mobility—users carry cell phones or other mobile
devices

• Broad reach—people can be reached at any time

• Ubiquity—easier information access in real-time

environment

• Convenience—devices that store data and have

Internet, intranet, extranet connections

• Instant connectivity—easy and quick connection to

Internet, intranets, other mobile devices, databases

• Personalization—preparation of information for

individual consumers

• Localization of products and services—knowing

where the user is located at any given time and match
service to them.

WIRELESS
TELECOMMUNICATIONS
TECHNOLOGY ROADMAP

 1st Generation- 1G: Analogue network (1979-1992)

 Cellular Networks

 Frequency Division Multiple Access (FDMA)

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  Advanced Mobile Phone Service (AMPS) –the world’s
first standardized analogous service, discovered in
1983 by AT&T Bell Laboratories

 2nd Generation- 2G: Digital network

 Time Division Multiple Access (TDMA)- promoted by

the Universal Wireless Communications Consortium

 Global System for Mobile communications

specifications (GSM)- based on TDMA; debut in 1991

 Code Division Multiple Access (CDMA)- championed by

the CDMA Development Group

1993-The CDMA Development Group (CDG) established

IS-95, the industry standard for CDMA wireless cellular
service.

1995- The world’s first commercial rollout by Hutchison

Telecom took place in Hongkong.

1997- The platform acquired its trade name

‘cdmaOne’.

 2nd & a Half Generation- 2.5G

 General Packet Radio Service (GPRS)- In 1996, the

European Telecommunications Standards Institute or
ETSI rectified the GSM Phase 2+ release that included
a radical technology enhancement called GPRS.

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 British Telecom Cellnet inaugurated the world’s first
commercial GPRS in June 2000.

 CDMA IS-95B – debut in early January 2000 in Japan

with a sparkling 64kbps data rate.

The notion of wireless Internet access was becoming

within reach.

An irreversible trend was developing towards even

more bandwidth hungry Internet applications.

 2.75G

 The Universal Wireless Communications Consortium

(UWCC) and the GSM Association (GSMA) endorsed
EDGE ( Enhanced Data rates for Global Evolution) , a
component of the 1996 ETSI GSM Phase 2+ standard.

Commercially available after 2001.

Data transmission speeds of 384kbps-553.6kbps.

 The CDG evolved its next-generation cdmaOne

standard by July 1999. Called cdma2000 Phase 1 or
1xRTT, it gave data speeds of between 144kbps-
614kbps.The first 144kbps 1xRTT service was

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 commercially launched in Korea by SK Telecom in
October 2000.

 3rd Generation- 3G: Broadband network

 Service incompatibility among different mobile

networks was a big roadblock. Subscribers
committing to GSM handsets could access GSM
networks at home and even abroad, but not CDMA
ones, and vice versa.

 The International Telecommunications Union or ITU

had working groups convened since the early 1990s
in a grand attempt to propound a single global
standard for telephony.

 The first International Mobile Telecommunications

2000(IMT-2000) recommendations were received
from organizations as diverse as the UWCC, GSMA,
CDG and the Third Generation Partnership Project or
3GPP--- the umbrella association of national
telecommunications standards authorities from the
United States, Europe, China, Japan & South Korea.

 The CDG lined up ITU-endorsed IMT-2000 compliant

standards in its stable, namely cdma2000 1xEV and
cdma2000 Phase 2 (3xRTT)

 Universal Mobile Telecommunications System (UMTS)

was the GSM camp’s IMT-2000 initiative advocated by
the 3GPP and the UMTS Forum

 UMTS employed a new ITU approved radio

transmission technology called Wideband-CDMA (W-
CDMA) to reach IMT-2000 compliance.

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  The first commercial 3G services were launched in
Japan by NTT DoCoMo in May 2001.

 4th Generation- 4G: fully IP based network; will provide

faster multimedia display (2006-2010)

WIRELESS MESSAGING
DEVELOPMENTS

 SMS- Short Message Service

 Wireless service conceived for the bi-directional
exchange of short alphanumeric messages of upto 160
characters each among mobile services.

 Originally developed in 1991 as part of the GSM Phase

1 standard.

 Almost all communications systems support it.

 Short messages ride on a separate signaling path.

 EMS- Enhanced Messaging service

 A minor extension to SMS, promulgated by the ETSI

 It imbues messages with a rich mix of formatted text,

simple animations, tiny pictures and small melodies.
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  EMS-enabled handsets were commercially available by
the first half of 2001.

 MMS- Multimedia Messaging Service

 Proposed by the 3GPP as the next generation wireless
messaging system.

 A single message can contain text, audio clips, still

pictures, animated images, full-motion video and other
multimedia embellishments destined for viewing on
MMS-enabled terminals.

Wireless Application Protocol

(WAP)
• The drivers- Fragmented standards and incompatible
systems well into the

1990s.

- Dire need of a focal point as the launch

pad to a new wave of

research and development.

• Recognizing the need for a more coordinated strategy,

wireless telecommunications luminaries Ericsson, Motorola,
Nokia, and Phone.com founded the Wireless Application

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 Protocol Forum in mid-1997 with a view to forging an
open, extensible and unified industry standard for delivering
sophisticated telephony services over wireless networks to
mobile devices.

• Devices as diverse as mobile phones, alphanumeric pagers,

PDAs and other wireless appliances, and practically all
cellular network technologies from 2G to 3G are supported.

• At the core of the application development environment is

the micro-browser or WAP browser, essentially a highly
trimmed and pared-down version of the conventional
Internet Web browser software.

• Internet content encoded in Hypertext Markup Language

(HTML) for transmission via the Hypertext Transfer Protocol
(HTTP) is far too bandwidth-heavy for the purpose of
conveying information essentially to mobile devices. Instead,
WAP encodes content using the lightweight Wireless
Markup Language (WML) and transmits compressed
binary code data in place of plain text.

WML Script is WAP’s equivalent to JavaScript- Derived from

JavaScript™

 WML optimizes content for viewing on small screen displays

typical of wireless terminals and facilitates easy, one-hand
operation of the built-in micro-browser.

• Unique to the WAP framework is data push support: a

network server can proactively initiate the sending of

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 content wirelessly to a target WAP device and not merely
respond passively to data requests, allowing automated
dispatch of time-critical information such as alerts and
notifications to WAP subscribers.

• The WAP security framework is based on Internet security

standards. Optimised for response speed over low
bandwidth, high latency wireless networks, authentication
and encryption is implemented to provide privacy and data
integrity for secure communications and transactions.
Support is being added for Public Key Infrastructure
(PKI) cryptography for digital signatures, enhancing the
viability of WAP as a platform for mobile e-commerce and
secure wireless access to sensitive data stores such as
corporate Intranets and databases.

• WAP-enabled handsets have become commercially

available from 2000.

• WAP has two available channels:

 Voice channel- the cost is based on the number of

additional online minutes required for the cardholder to
perform authentication.

 Data channel- the cost of authentication depends on the

amount of data transmitted.

• WAP has become the de facto standard for wireless data

services.

• WAP is the dominant mobile Internet platform supported

by the majority of network operators.

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WAP ARCHITECTURE

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 MOBILE COMPUTING
INFRASTRUCTURE
• HARDWARE:

 Cellular (mobile) phones

 Attachable keyboard

 Personal Digital Assistants (PDAs)-handheld wireless

computers

 Interactive pagers

 Other devices

 Notebooks

 Handhelds

 Smartpads

 Screenphones—a telephone equipped with color

screen,keyboard,e-mail, and Internet capabilities

 Smartphones—Internet-enabled cell phones with attached

applications

 E-mail handhelds

 Wirelined—connected by wires to a network

• Unseen infrastructure requirements:

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 Suitably configured wirelined or wireless WAN modem

 Web server with wireless support

 Application or database server

 Large enterprise application server

 GPS (satellite-based Global Positioning System) locator used

to determine the location of mobile computing device carrier

• Software:

 Microbrowser- Wireless Markup Language (WML) based

 Mobile client operating system (OS)- e.g Windows

2000/2001/NT, Palm OS, Win CE, etc.

 Bluetooth—a chip technology and WPAN (Wireless Personal

Area Network) standard that enables voice and data
communications between wireless devices over short-range
radio frequency (RF).

 Bluetooth is the codename for a small, low-cost, short

range wireless technology specification.

 Enables users to connect a wide range of computing

and telecommunication devices easily and simply,
without the need to buy, carry, or connect cables.

 Bluetooth enables mobile phones, computers and PDAs

to connect with each other using short-range radio
waves, allowing them to “talk” to each other.

 It is also cheap

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 Mobile application user interface- Application logic under the
browser

 Back-end legacy application software

 Application middleware- e.g. IBM Websphere

 Wireless middleware –links multiple wireless networks with

application server

• Networks and access:

 Wireless transmission media

 Microwave

 Satellites

 Radio

 Infrared

 Cellular radio technology

 Wireless systems

THE M-COMMERCE VALUE

CHAIN
24
 ENTITIES
• Customer: who is mainly mobile. The place where the
transaction is initiated can be different from the place where
he receives the service, pays and the transaction is
committed. These places can be in different countries or on
the borders of countries and the consumption of the services
he has acquired can take place in a third country.

• Content/Service Provider: who provides specific contents

to a customer through a WAP Gateway which can be hosted
at the Mobile Network Operator or though a portal that can
be hosted at the operator’s WAP server or anywhere else.

• Mobile Portals: that offer personalized and localized

services to customers.

• Mobile Network Operator: The role of the operator is very

vital for the mobile electronic commerce. Depending on
where it stands in the whole value chain of m-commerce, its
role can vary from a simple mobile network provider to an
intermediary, portal or trusted third party. The role of the
operator can be quite complex and affect also the billing and
payment of m-services.

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 Mobile network operators have a number of advantages
over other portal players:
 They have an existing customer relationship and
personal data.
 They can identify the location of the subscriber.
 Traditional portal doesn’t usually have a billing
relationship with the customer.
 Provide bundle services: Provides offers with a
combination of various purchases from different suppliers
with discounts. So, e.g, if customer wants to buy product A
from supplier X, he may find out about an offer from the
Telecom Operator about two products A and B from different
suppliers at a lower price.
 Act as a front- end to the bank: The customer pays to the
operator who, in this case, is also responsible for payment
refund to the customer if the latter is not satisfied with the
products.
 Act as Trusted Third Party: In cases the customer wants to
buy a number of goods from various suppliers who must
interoperate.

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 APPLICATIONS OF MOBILE
COMMERCE
Mobile financial applications (MFA) –
 mobile banking
 brokerage service
 mobile money transfer
 mobile micropayments.
These services could turn a mobile device into a business tool,
replacing bank, ATM, and credit cards by letting a user conduct
financial transactions with mobile money. Secure transactions are
required before any of these applications are widely deployed.
One interesting mobile financial application is micropayment
involving small purchases such as vending and other items. A
mobile device can communicate with a vending machine using a

27
local wireless network to purchase desired items. Micro-payments
can be implemented in a variety of ways.
 the user could make a call to a certain number where per-
minute charges equal the cost of vending item.
This approach has been used by SONERA, a Finnish wireless
provider, in their famous Coke (and now Pepsi) machine service.
In effect, it collects money from the users and credits it to the
vending providers.
 using pre-paid numbers purchased from a service provider,
bank, or credit-card company.
To support financial transactions including micro-payments, a
mobile service provider could act as a bank, acquire a bank, or
compete with a bank.

Mobile advertising – Using demographic information collected

by wireless service providers and information on the current
location of mobile users, very targeted advertising can be done.
The advertising messages can be personalized based on
information provided by consulting the user at an earlier stage or
by the history of users’ purchasing habits. Advertisements sent to
a user can also be location sensitive and can inform a user about
various on-going specials (shops, malls,
and restaurants) in surrounding areas. This type of advertising
can be performed using Short Messaging Service (SMS) or by
using short paging messages to mobile users. The messages can
be sent to all users located in a certain area (the geographic
region can be identified by advertisers or even by users in
advance), a user-specific message can be sent independent of
the user’s current location. As more wireless bandwidth becomes
available, content rich advertising involving audio, pictures and
video clips can be produced for individual users with specific
needs, interests, and inclinations. Also depending on interests
and the personality

28
type of individual mobile users, a network provider may consider
using a “push” or “pull” method of mobile advertising based on a
per-user basis or a class of users. Other interesting issues include
the number of advertisements and the
level and type of content that should be transmitted. These
advertisements should be limited to avoid overwhelming the user
with information and also to avoid the possibility of congestion of
the wireless links. Wireless networks may consider such
advertising lower priority traffic if network load crosses a certain
threshold. Since these services need the current location
information of a user, a third party may be needed to provide
location services. However, this may require a sharing of
revenues between the network service provider and location
service provider.

Mobile inventory management (MIM)- This class of

applications involves location tracking of goods, services, and
possibly even people. The tracking of goods may help service
providers in determining the time of delivery to customer, thus
improving customer service and obtaining a competitive edge
over other businesses.

One very interesting application is “rolling inventory” – which

may involve multiple trucks carrying a large amount of inventory
while on the move. Whenever a store needs certain items/goods,
it can locate a truck (preferably in nearby area) and just-in-time
delivery of goods can be performed. The rolling inventory and
delivery application can reduce the amount of inventory space
and cost for both vendors and stores and may also reduce the
time between when an order is placed and the goods are
delivered. Rolling inventory is a B2B m-commerce application
while location tracking can be considered a B2C application.
Using inexpensive embedded radio/microwave devices (chips), a
wireless network can track goods and services. Since satellite

29
signals may not work well inside a truck, a separate wireless LAN
can be provided on-board for intratruck communication and
tracking. An interesting research problem is to determine an
appropriate match for the amount of inventory carried by trucks
in a geographical area with dynamically changing delivery
demands. Also traffic in a city may affect the just-in-time delivery
in nearby areas.

Another example of MIM is just-in-time delivery/movement of

components in an assembly plant based on the rate of
consumption of existing components. A variety of new
components can be moved at a certain speed after receiving a
wireless signal from the components reaching the assembly line
or from a device on the assembly line itself. This will allow just-in-
time delivery leading to a reduced inventory and assembling cost.
If the new components are delayed for some reason, then signals
can be sent to the assembly line for possible adjustment of the
assembly speed to match the arrival time of new components.
Such an application would reduce the inventory cost while
increasing productivity by matching the speed of new component
arrival to the rate of assembly.

Potential MIM customers may include shipping companies,

assembly plants (auto, manufacturing), airline/mass-transit
industry, and supermarket chain stores. One positive factor is
that many of these industries are already increasing their use of
wireless technologies.

Possible wireless technologies that can be used with MIM include

Global Positioning Satellite Systems (GPS) that are operated by
the Department of Defense for location tracking (the accuracy
level is based on the type of receiver and the type of user). Many
luxury cars already have built-in GPS receivers that compute
location information based on received signals from at least 4
(out of 24) GPS satellites. GPS may not work well for indoor
30
environments, as they require line of sight transmission between
devices and satellites. Another location tracking application is
called E (enhanced) 911. E-911 allows operators to receive
location information of cell phone users along with their
emergency calls. Since it is difficult for cellular/PCS systems to
provide such location information, it is likely that a GPS chip will
be installed on cell phones to help 911 operators to determine the
location of mobile users. If such a chip is installed in cell/PCS
phones, then location tracking of such users under normal
circumstances will also be possible. Since “people” can also be
considered inventory resources, they could also be better
managed.

Product location and search (PLS)- This class of applications

includes locating an item in a particular area or location. This is
somewhat different from the previous class of applications as
here we are concerned with finding an item (or person) with
certain specifications, and whether it is available in a specified
area or not. Potentially, there could be multiple places where
such an item or an item of similar attributes (also specified by the
user) are located. Currently, many people go to several stores to
find an item (certain brand/size of TV, VCR or an automobile) and
compare price and features. Using a mobile device (such as
PalmPilot, Nokia Communicator or Net Phone) and a centralized/
distributed database containing information on products, a user
should be able to find the exact location of a store where a
certain item is located. A list of locations and distance from a
specified point can also be displayed. After that the user can buy
on-line using a browser on his/her mobile device. In the case of
multiple stores/vendors carrying an item desired by a user, they
could compete to get the customer by real-time manipulation of
prices or by offering instant discounts.

31
From a technological point of view, a mobile user can send a
query message to a centralized location, which in turn can
interface several different stores/dealers and decide if the item is
available or not (and if yes, at what price). Alternatively,
stores/vendors may connect their inventory record systems to
this site. Since the inventory of different vendors may use
different code names, a uniform product naming system (or
existing code such as UPC) that allows for easy translation to
standard web content will be required.
Two factors to consider are:
(a) how the database will price its services to vendors/dealers
and
(b) the correctness of information (related to availability or price)
from inventory to the database or website.
We also believe that software agent technologies will prove to be
invaluable as multiple agents can be deployed (cooperating &
negotiating) to conduct various transactions at different places.

Proactive service management (PSM) – This class of

applications is based on collecting pertinent information about
current or near-future user needs and providing services to users
proactively. One such application may involve collecting
information about the aging components of an automobile. Many
vendors including car dealers/repair shops can increase their
business by acquiring information about aging components of an
automobile. Information can be collected and used by car dealers
for ordering components (thus reducing inventory costs). In a
more elaborate scenario, several dealers/shops can compete for
business by offering discounts or lower rates. Such information
can also be collected and analyzed by manufactures to improve
the design and manufacturing of future products. This service
could even be offered as part of the warranty for new cars or
could be purchased by current automobile owners. This would

32
help reduce anxiety levels of owners and improve the general
conditions of automobiles on the road leading to a reduced
number of traffic jams, accidents, and even fatalities. From a
technological point of view, automobiles can be equipped with
smart sensors that keep track of how much wear and tear a car
component has gone through. This information can then be
transmitted using a radio/microwave/satellite system to a
specified service center or other location. Some implications of
such applications are privacy, security, reliability, and cost of
deployment. However, we envision that car dealers, repair shops,
automobile owners, and even law enforcement officers (from the
public safety point of view) would be interested in such an
application.

Wireless business re-engineering – Many insurance business

situations involve going to customers premises, taking notes of a
particular situation, going back to the office, and then taking
suitable actions. This process takes a long time and is not very
efficient. To improve this business practice, a wireless business
re-engineering application can be used which allows on-the-spot
claim adjustment. In such a scenario, a claim adjuster goes to the
customer’s place, takes pictures and stores them in his/her
mobile device for uploading to the company’s database. Next the
adjuster downloads necessary information (customer’s profile
and coverage information) from insurance company’s database.
Using a small printer attached to the mobile device, he/she prints
a claim check. This entire process is performed in minutes as
opposed to days. The speed of this kind of service can
significantly add to a company’s bottom line and competitive
advantage. Security and connectivity issues are important as they
may affect the perceived quality of service by a customer.

33
Mobile auction, entertainment and other services – With an
increasingly mobile society, more and more people are on the
move. While mobile, people may prefer to be involved in some
business or entertainment activities. Many of these services can
be offered to people through mobile devices and wireless
networks. These include mobile auction/reverse auction, video-
on-demand services, and other entertainment-oriented services.
The technologies needed include mobile devices with capabilities
to match desired applications, suitable mobile middleware, and
wireless networks with high bandwidth (such as emerging LEO
satellites or third generation wireless networks). Continued
connectivity is a real important issue as it may affect the
perceived quality of service for entertainment/information
services. For auction/ reverse auction, frequent disconnection
may seriously affect the usefulness of this service unless it can be
guaranteed that if users get disconnected, the state of auction
will be maintained and disconnected users will not suffer any loss
during periods of disconnection.

Table : M-Commerce Applications

Class of Details Examples

Applications
Mobile financial Applications where Banking, brokerage
applications( B2B, mobile device & payments for
B2C) becomes a powerful mobile users
financial medium
Mobile advertising Applications turning User-specific &
(B2C) the wireless location-sensitive
infrastructure & advertisements
devices into a
powerful marketing
medium
Mobile inventory Applications Location tracking of

34
management (B2B, attempting to goods, boxes, troops
B2C) reduce the amount & people
of inventory needed
by managing in-
house & inventory-
on-move
Product location & Applications helping Finding the location
shopping (B2B, B2C) to find the location of a new/used car of
of product & certain model, colour
services that are & features
needed
Proactive service Applications Transmission of
management (B2B, attempting to information related
B2C) provide users to aging(automobile)
information on components to
services they will vendors
need in very- near-
future
Wireless re- Applications that Instant claim-
engineering (B2B, focus on improving payments by
B2C) the quality of insurance companies
business services
using mobile devices
& wireless
infrastructure
Mobile auction or Applications allowing Airlines competing
reverse auction users to buy or sell to buy a landing
(B2B, B2C) certain items using time slot during
multicast support of runway congestion
wireless (a proposed solution
infrastructure to air-traffic
congestion problem)

Class of Details Examples

Applications
Mobile Applications Video-on-demand,
entertainment providing the audio-on-demand, &
services & games entertainment interactive games.
(B2C) services to users on

35
 per event or
subscription basis
Mobile office(B2C) Applications Working from traffic
providing the jams, airports &
complete office conferences
environment to
mobile users
anywhere, anytime
Mobile distance Applications Taking a class using
education (B2C) extending streaming & video
distance/virtual
education support
for mobile users
everywhere
Wireless data Applications Detailed information
center(B2B, B2C) supporting large on one or more
amount of stored products can be
data to be made downloaded by
available to mobile vendors
users for making
“intelligent”
decisions

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 M-COMMERCE REVENUES
• SOURCES -
 eCommerce Portals
 Short Messaging Services (SMS)
 Subscription-Based Services
 Revenue accrued from introducing new customers
 Revenue-sharing between Wireless Network Operators

• US Mobile Commerce Revenues-

Year USD (in
billions)
2007 58.4
2006 29.0
2005 13.1
2004 5.7
2003 2.1
2002 0.616
2001 0.127

• Global m-Commerce Revenue -2009

Category Value (USD)
Global revenues 88 billion
Ticket purchases 39 billion
Phone-based retail 299 million
POS sales

37
 • Global m-Commerce Revenues:

REGIO 2000 2001 2002 2003 2004 2005

N
Japan 0.4 1.2 2.1 3.5 4.5 5.5
Asia 0.4 1.3 2.6 5.0 7.4 9.4
Wester 0.0 0.1 0.5 1.7 4.6 7.8
n
Europe
US 0.0 0.1 0.2 0.6 1.7 3.3
North 0.0 0.1 0.2 0.7 1.8 3.5
Americ
a
Latin 0.0 0.0 0.0 0.1 0.2 0.5
Americ
a
Others 0.0 0.0 0.1 0.2 0.4 1.0
Global 0.4 1.5 3.4 7.6 14.5 22.2

38
 A FEW MORE STATISTICS
• Global Internet and Wireless Users:
Subscribers 2001 2004 2007
Internet 533 945 1460
users
(millions)
Wireless 16 41.5 56.8
Internet
users as % of
all Internet
users

• PC vs. Mobile Penetration:

39
 ISSUES IN M-COMMERCE
WIRELESS PRIVACY- Mobile network location-based services
offer content and service providers an unprecedented avenue to
target consumers based on their physical locale. With location
technology steadily improving, it is plausible subscribers could
soon be placed with near pinpoint accuracy. Consumer advocates
view this to be a threat to personal privacy, with the associated
issues of undue surveillance, spam and profiling.
It is conceivable location data could be collected to explicitly
track the physical movement of a particular subscriber within the
network coverage. This could escalate to become a personal
safety issue if the location information fell into the wrong hands
through inadvertence or malicious theft.

PREVENTIVE MEASURES:
• Stringent industry self-regulation such as using low
granularity location information when precision is neither
critical nor desirable.
• Obtaining explicit user consent before releasing location
details to advertisers
• Guaranteeing user anonymity even when data is used---by
applying only aggregate information without identifying
specific individuals.

WIRELESS PAYMENT SYSTEMS- The use of transmission

encryption technology has essentially contained the risks
inherent in sending credit card information over the Internet to
online merchants for payment settlement. Encrypted details like

40
card number and expiration date are largely secure en route,
although this does not prevent subsequent misappropriation at
the destination. To further fortify security, credit card companies
have implemented authentication systems that verify the
identities of transacting parties. Advocated by Visa and
Mastercard, the Secure Electronic Transaction system is
supported by major banks but has been relatively costly for
merchants to implement, delaying its widespread adoption. But
the biggest shortcoming of credit card settlement schemes by far
relates to the expensive fixed transaction overheads that favour
higher value transactions, precluding cost effective use for small
value payments.

WIRELESS SECURITY – Concerns about security risks is the

overriding reason why firms have delayed deploying wireless Web
technologies. Respondents found the WAP 1.2 specifications
immature and insecure for enterprise class deployment. The WAP
Forum has committed to delivering version 1.3 which will enable
end-to-end security and add support for Public Key Infrastructure
(PKI) cryptography, removing another obstacle to the viability of
WAP as a secure wireless platform. M-commerce applications
providers can use WAP digital certificates to authenticate
between transacting parties and to enable encrypted
communications over the Intranet and mobile networks. Web
merchants can hence conduct secured transactions with mobile
customers.

Computer viruses have begun the migration to hand-held devices

like PDAs and even mobile phones as such terminals gain more
processing power and intelligence. With the use base of cellular
phones outstripping that of personal computers, it was only a
matter of time before malicious individuals targeted the platform
with rogue code. This would present a significant security risk in
the future to mobile users who are growing increasingly reliant on

41
their wireless devices not just for voice but data services such as
mobile commerce.

The first computer virus known to have specifically targeted

mobile phones as part of its payload was isolated in Spain in mid-
2000. The virus was spread as an e-mail enclosure on
conventional computers but was also designed to send prank SMS
text messages to randomly selected mobile phone numbers on a
particular cellular network in the country. Had the outbreak not
been contained early, the flood of messages could potentially
have crippled the network. Few mobile phones today possess the
capability to handle e-mail attachments, but subsequent
generations of Internet-enabled devices will be better equipped
and hence be more vulnerable. Anti-virus vendors have already
begun shipping anti-virus programs for hand-held computers but
the onus remains on users to be vigilant to the possibility of such
infections in times to come.

WIRELESS EMISSION AND PUBLIC HEALTH- The mobile

telecommunications industry has long grappled with the
contentious issue of cellular radio frequency (RF) emission and
the impact on public health and safety. In particular, there is fear
that emission from wireless handsets and cellular base stations
may actually be cancer-inducing, sparking public outcry for
manufacturers to be forthcoming about the true ramifications,
given the rapid increase in the use of mobile phones and related
technologies.

Research has clearly demonstrated an increase in traffic

accidents when mobile phones are operated while driving---even
using so-called hands-free kits. There is also evidence to suggest
the possibility of electromagnetic interference from the use of
cellular phones near sensitive medical devices such as
pacemakers and hearing aids, and aircraft devices.

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Obstacles preventing M-Commerce:
OBSTACLES PHONES PDAs
Credit card security 52% 47%
concerns
Fear of 'klunky' user 35% 31%
experience
Don't understand how it 16% 16%
would work
Never heard of it before 10% 12%
Others 11% 13%

Forrester also indicated that fewer than 15% of

consumers feel completely comfortable sending their
payment card details over mobile networks and over 65%
claim to be “averse” to sending confidential information.
Security is the most important factor.

43
 CONCLUSION
Considering that most people would rather lose their wallet than
misplace their cell phone, it’s fitting that the mobile world is
quickly becoming a new hub for business. For many of us, our
cell phone never leaves our side. It holds a place at the
dinner table, is easily accessible in our bag’s front pocket,
and often, somehow it even manages to end up sharing our
pillow at night. Busy schedules mean people are often on the
move and when marketers and companies can’t reach
consumers at their computers, on TV, before the previews at
the movies, with billboards, or magazine and newspaper ads,
they must feel assured that they can still reach them on their
cell phones.

Mobile commerce, or m-commerce, is simply the ability to

conduct business transactions through a mobile device. With
smartphone sales rising 49% in the first quarter of 2010, never
before has it been so easy to shop, anywhere, anytime from the
palm of your hand. There is an enormous amount of ongoing
market research, and though there has been a variety of numbers
estimated and reported, they all conclude that mobile commerce
is a profitable and rapidly growing market.

By 2015, it’s estimated that shoppers from around the world will
spend about $119 billion on goods and services bought via their
mobile phones, according to a study by ABI Research released
this past February. In the United States alone, mobile shopping
rose from $396 million in 2008 to $1.2 billion in 2009, and mobile
campaign spending also increased by 25 to 30% over the past
year, with companies shelling out just under $313 million
according to the same study. Senior Analyst Mark Beccue, said
that he’s forecasting U.S. sales to reach about $2.2 billion in
2010.
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Here are five mobile commerce trends to keep an eye on
for the remainder of 2010.

1. Bargain Hunting

It would seem that mobile purchasing often lends itself to an

impulse buy. Maybe you just have to suddenly download that
song from the iTunes Store or really want to make sure you have
tickets to that hot concert. In this case, it’s the savvy shopper
that has taken note of mobile commerce. Beccue said that in the

45
fourth quarter of 2009, he started to notice something
unexpected and a bit “weird.”

Bargain hunting has become extremely popular with apps like

RedLaser that allow users to scan product bar codes and discover
it’s various prices at different retailers. Shoppers are melding the
two worlds of online/mobile shopping with actual physical
shopping to make sure they get the best prices.

2. Mobile Ticketing

“Do you have the tickets?” We’ve all been asked or have asked
that question always expecting an affirmative answer, but despite
our positive thinking someone often forgets the tickets. But that
could very well be a conversation and frustration of the past
given that mobile ticketing transactions are expected to exceed
$100 billion worldwide by 2012, according to a study released this
month by Juniper Research. No doubt, the convenience of mobile
ticketing, where customers can order, pay for, and validate
tickets anywhere or anytime from their cell phones, is a driving
force in its popularity.

46
Websites like Fandango and MovieTickets.com have made
snagging seats to the hottest movie of the moment that much
easier (or more competitive) with their mobile ticketing apps. A
few months ago, Inception, starring Leonardo DiCaprio, was sold
out all weekend, but mobile ticketing likely helped movie goers
nab those last few seats. And industry sources say that mobile
ticketing can account for up to 10% of ticket sales for
blockbusters like Avatar on opening weekend. “It’s a small but
growing percent of overall ticket sales,” said Harry Medved,
director of marketing at Fandango.

3. Banking

We’ve been getting used to mobile banking for a while now. Most
of us have our accounts setup online and check our balances on
the phone. But according to data released by comScore, 13.2
million people accessed their bank accounts from their phones
during the month of April alone, which is a 70% increase from a
year ago. And similarly, the number of people using mobile
banking apps more than doubled, to about 5 million in the last
year.

4. Tangible Goods

So what are people actually buying with their phones? According

to a survey by the Mobile Marketing Association, 17% of mobile
commerce was used for purchasing applications and ringtones,
while another 6% of people used their phones for discounts and
coupons, and another 6% used their phones to buy tangible
goods — that is, actual goods that you can put in your hands.

According to Beccue, eBay has been the standout leader in

mobile commerce with their iPhone app that launched in 2008,
and their Blackberry and Android applications that launched in
2009 and 2010. In 2009, the company saw more than $600

47
million dollars in goods sold via the mobile app, which was a
200% increase from 2008. The launch of their app notified
bidders with push alerts and SMS notifications when they had
been outbid, and allowed them to cast another attempt or keep
track of ending auctions. According to eBay, one item is
purchased every two seconds using eBay mobile app, with
apparel, auto parts, cell phones/accessories, sporting goods and
collectibles ranking as the top five categories of purchased items.

5.Marketing

Mobile commerce is growing and it is directly related to the

amount of mobile marketing that companies are investing in. A
reported 74% of online retailers either have in place or are
developing mobile commerce strategies, while 20% have already
implemented their complete plans, according to a study by the
National Retail Federation.

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Text message marketing, where customers opt-in to receive news
about deals or offer coupons, has been a widely adopted practice
as it’s a direct way to engage with consumers that has a high
likelihood of being read. Retailers are also investing more time
and money into creative ways to reach consumers via their
mobile phones with campaigns that enhance the brand identity or
the shopping experience. eBay’s recent launch of their Fashion
App is a great example. The app allows users to browse for
clothes, have access to exclusive sales, and “try on” an outfit by
snapping a picture with the iPhone’s camera. It then let’s you
share your outfits with friends on Facebook and Twitter. All of the
features really add to the shopping experience, but most
importantly, consumers are able to buy and bid on what they like.

REFERENCES
• An Introduction to E-Commerce, Winter

• Mobile Commerce: Framework, Applications and

Networking Support (UPKAR VARSHNEY, Department of
Computer Information Systems, Georgia State University,
Atlanta, USA and
RON VETTER, Department of Computer Science, University
of North Carolina, Wilmington, USA
--- an excerpt from Mobile Networks and Applications,
Kluwer Academic Publishers, Netherlands, 2002

• FROM E-COMMERCE TO M-COMMERCE: THE POWER OF

THE MOBILE INTERNET (Clarence N W Tan, T W Teo)---
Working paper, 2001
[ This paper is also included in the book “ INTERNET
MANAGEMENT SCIENCE: A GLOBAL PERSPECTIVE” by
Idea Group Publishing]

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• www.wikipedia.org

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