Mobile Commerce Strategy

M-Commere Strategy

Agenda
Definition Technology

1G,2G,2.5G,3G,iB3G,4G, Pervasive Computing

Location sensitive, Time Critical, Controlled by information receiver or provider ,EC vs. MC

Applications

Value Chain
Q&A

Business Model

M-Commere Strategy

Defining m-commerce
Mobile commerce (M-commerce) is concerned with the use, application and integration of wireless telecommunication technology and wireless devices within the business systems domain.
Location independent connectivity Mobile Internet Mobile E-commerce Mobile phone, Mobile device (PDA, wireless vending machines, wireless LAN,) (Elliott, Phillips, 2004 )

Ramifications for wireless design:E M (Venkatesh, eds., 2003)

M-Commere Strategy 3

The M-commerce Systems Environment

(Elliott, Phillips, 2004 )
Wireless Vending Devices (M-Wallet capable)

Voice, Picture, SMS, And Data

M-Commere Strategy

A short history of wireless computing

Sources form: Web Site [1]

In 1897, Guglielmo Marconi first demonstrated the ability of wireless contact

M-Commere Strategy

1G: Analog Communication

(Elliott, Phillips, 2004 ) Only in certain environments, particularly in government agencies and the military 1946 AT&T Bell introduced the first commercial mobile phone 1960s AT&T Bell developed the IMTS (Improved Mobile Telephone Services) Late 1970s and early 1980s, microprocessor technology and improvements in cellular network infrastructure led to the birth of 1G, wireless telecommunications systems 1980s
Nokia in Finland Ericsson in Sweden Motorola in USA Sweden, Japan, and USA developed their own standard Roaming was extremely difficult

M-Commere Strategy

1G: Analog Communication

(Elliott, Phillips, 2004 )

NMT system (Nordic Mobile Telephone )

Finland, Norway and Sweden

AMPS (Advanced Mobile Phone Service)

In various parts of Asia, the USA and Canada

ETACS (Extended Total Access Communication Systems)

United Kingdom

JDC (Japan Digital Cellular) network system

Japan
M-Commere Strategy 7

2G: Based on Digital Technology

(Elliott, Phillips, 2004 ) 1G, lack of security and the proliferation of different wireless network standards 2G occurred in early 1990s GSM (Global System for Mobile Communication)
More global compatible telecommunication network European-Centric development Less costly Roaming was possible Fully specify the complete network structure

As well as voice communications, 2G mobile phone can send and receive message

SMS (Short Messaging Services) Mobile Internet Browsing, via the WAP (Wireless Applications Protocol)

M-Commere Strategy

2G Phone connection to the Mobile Internet

Source: Kavassalis et al., 2003

M-Commere Strategy

2.5G: Digital With Package Switched

(Elliott, Phillips, 2004 )

One significant drawback to 2G GSM network primarily voice-centric with limited data transmission characteristics GPRS (General Packet Radio Service)
Developed in late 1990s and early 2000s Higher transmission rates and always-on connectivity E-mail can be received on a mobile phone handset without the need to dial-up WAP content can be accessed at a quicker rate
M-Commere Strategy 10

Source: Collis , 2003 M-Commere Strategy 11

3G: Third generation wireless communication

(Elliott, Phillips, 2004 ) 3G technology is aimed at providing a wide variety of services and capability in addition to voice communication, such as Multimedia data transfer, video streaming, video telephony, and full, unabridged Internet access Providing Data Centric Services with enhanced voices and multimedia capabilities UMTS (Universal Mobile Telephony Systems )
A new Network service replacement for the GSM

3G is to provide an economically viable and technology-enhanced PCS portal First introduced to Japan in 2001, and spread to Europe and USA in 2002 Life Style Portal Location dependent information
M-Commere Strategy 12

3G: Third generation wireless communication

source form: 3GPP TS 23.228, 24.228, 23.102

M-Commere Strategy

13

Sources form: Web Site [2]

M-Commere Strategy

14

Future Development
iB3G 4G Pervasive Computing

M-Commere Strategy

15

iB3G: Combining the best of both

dual-mode handset
Source form: , 2004

Cellular
Coverage Mobility Billing System Roaming Widespread 2G/2.5G, PHS,3G, B3G

WLAN
Bandwidth Cost Multimedia Services Always Connected Easy to Setup 802.11a,802.11b, 802.11g

M-Commere Strategy

16

4G: 4th Generation Wireless System

source from: BWN Lab, web site [3]

Reasons to Have 4G
Support interactive multimedia Wider bandwidth, higher bit rates Global mobility and service portability Low cost Scalability of mobile networks

Whats New in 4G
Entirely packetswitched networks All network elements are digital Higher bandwidth and lower cost (up 100Mbps) Tight network security
17

M-Commere Strategy

Pervasive Computing
source from: IBM Web Site [4,5]

Pervasive Computing
Enabling information access anywhere, anytime, on demand Pervasive Computing delivers mobile access to business information without limits- from any device, over any network, using any style of interaction. It give people control over the time and the place, on demand.
M-Commere Strategy 18

Pervasive Computing for a Nomadic Lifestyle

Lessons Learned from MITs Project Oxygen, Zue 2004.

Some System-Level Challenges

Pervasive: Be available everywhere, at anytime, for anybody Nomadic: Allow people and devices to move around freely Embedded: Live in our world, sensing and affecting it Human-centered: Understand and respond to human intent; solve real problems Non-intrusive: Preserve privacy while ensure security Adaptable: Provide flexibility in response to change Eternal: Must never shut down or reboot Organic: Allow applications and services to be added easily
M-Commere Strategy 19

Integrated multimedia nature of 3G domain-

the PCS (Personal Communications Service)

(Elliott, Phillips, 2004 )

M-Commere Strategy

20

M- Commerce Applications
Delineating the effects of M-commerce: A space- time matrix M-Commerce applications are categorized along three dimensions:
Location sensitive Time critical Controlled by information receiver or provider

EC vs. MC
M-Commere Strategy 21

Delineating the effects of M-commerce:

A space- time matrix
Balasubramanian et al. 2002

M-Commere Strategy

22

Delineating the effects of M-commerce:

A space- time matrix
Balasubramanian et al. 2002

M-Commere Strategy

23

Taxonomy of M- Commerce Applications

Balasubramanian et al. 2002

The extent to which the applications is location sensitive The extent to which the applications is time critical The extent to which the applications is controlled by the information receivers or by the providers

Dimension 3: Controlled by the Information Receivers or by the Providers Dimension 2: Time Critical

Dimension 1: Location Sensitive

M-Commere Strategy

24

Mobile information assets: location sensitive

Rao, Minakakis, 2003 ;Balasubramanian et al. 2002

Deploy Mobile Internet services based on the various benefits of mobility

Information that is provided on a geographical locations Information that tracks an individual user (via their mobile phone) to determine their specific geographical location anywhere in the world
GPS (Geographical Positioning Systems) Support location-based services (LBS)

Location-tracking services are encouraged by both business and national government

e911 in USA: 999 in UK; 119 in Taiwan
M-Commere Strategy

25

Locations Assets
(Elliott, Phillips, 2004 )
Location-based services information Location-based product Retailing

Location-based Products

Location-based Access

Location-based Maps (directions)

M-Commere Strategy

26

Applications vary along the dimension in terms of the degree to which they are time critical
Participation in a virtual auction (+) Mobile access to digital libraries ()

Time Critical

Balasubramanian et al. 2002

It will involve the exchange of information related to a scheduled

Flight departure

Information that quickly depreciates in value

A stock price

Information that is required to address some emergence

A roadside assistance
M-Commere Strategy 27

Controlled by the information receivers or by the providers Balasubramanian et al. 2002

Applications controlled by an information receiver
Relates to more random, unforeseen needs A call for service after an automobile breakdown

Applications controlled by an information provider

Tend to be marketing broadcast activities
Coupon announcement

Maintain on an ongoing basis by service providers or coordinators

Monitoring of truck fleets using on board sensors

M-Commere Strategy

28

M-commerce vs. E-commerce

(Elliott, Phillips, 2004 )

E-Commerce is concerned with data and information transfer, and with Internet access, via wired technology M-Commerce is concerned with data and information transmission, and Internet access, via wireless technologies and various portable devices
M-Commere Strategy 29

Comparison between E-commerce and M-commerce

(Elliott, Phillips, 2004 )
Factor
Product or service focus

E-Commerce
Product focus

M-Commerce
Service focus

Product or service provision

Wired Global access

Wireless Global access

Product or service assets

Static information and data

Dynamic location-based data Mobility and Portability of access

Product or service attraction Fixed non-time-constrained access

M-Commere Strategy

30

Comparison between E-commerce and M-commerce

Barnes And Huff, 2003; Elliott, Phillips, 2004

Factor
Personal Devices Network Operators can determine the services Usage and Applications will charge

E-Commerce
PC: Medium No No standard way to charge; PC is essentially free

M-Commerce
Mobile phone : High Yes, like a gatekeeper Users seem prepared to pay a mobility premium

Users Location

Hard to find

Network Operator know who you are, where you are, can direct you to the portal of choice, and can charge you money
Yes, in which services are charged directly to the users phone bill Small 3.6%; 24%
31

Reverse Billing

No

Display Screen Size and Memory Medium Click through rates for banner AD and e-Mail (i-mode) PC Less than 0.5%
M-Commere Strategy

M-Commerce Value Chain Emerging Industry Structure (Bane, Bradley, and Collis (1998))
Phone Shopping Digital Wormhole Shop at home Facilitating Technologies Gambling Hardware Fileservers CPU Software Computing Algorithms Digital Signal Processing General Magic ATM Voice Television Computer Video Data

Terminal

Entertainment Transactions Education

Transmission

Manipulation

Pornography

Packaging

Publications

Content

= Industry size (relative)

M-Commere Strategy

32

M-Commerce Value Chain

European Commission 1996 (Barnes, Stuart J. 2002)

M-Commere Strategy

33

European Mobile Portal and Media Value Chain

Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf

M-Commere Strategy

34

i-mode and Media Value Chain

Source: http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct2002.pdf

M-Commere Strategy

35

MacDonald, 2003

M-Commere Strategy

36

M- Commerce Business Models

MacDonald, 2003

Brand Building or Media Mix Customer Relationship Management Online Retail Premium Content Aggregation B2B Advertising
M-Commere Strategy 37

MacDonald, 2003

9%

M-Commere Strategy

38

i- modes services Sources form: Web Site [6]

M-Commere Strategy

39

i- modes services Sources form: Web Site [6]

M-Commere Strategy

40

Sources form: Web Site [2]

M-Commere Strategy

41

Sources form: Web Site [2]

M-Commere Strategy

42

Sources form: Web Site [2]

M-Commere Strategy

43

Obstacles to M-commerce (I)

(Elliott, Phillips, 2004 )

Efficient and fast wireless telecommunications services are often focused within specific area
West Europe,the USA, Japan Not available in low population area Many developing countries has led these countries to adopt wireless telecommunications

Wireless Mobile Internet access more costly than wired Internet access
3G technologies and devices often deliver data content that are indistinguishable form those available on the wired Internet Mobile Internet users are accustomed to paying for Internet and correspondingly expect to pay for certain levels service and reliability

M-Commere Strategy

44

Obstacles to M-commerce (II)

(Elliott, Phillips, 2004 )

Concerns over privacy and security still pervade the wireless data transmission world
3G technology is inherently more secure than 2G Many government and business organizations banned the use of 2G mobile phone for private or secure conversations

Many individuals and organizations still harbor concerns over the health issues of wireless technology
With regard to microwave radiation emission levels Up to the year 2000 the studies remain inconclusive Many government are requiring mobile phone devices manufacturer to publish health evidence

M-Commere Strategy

45

The development of M-commerce

In Europe and Japan
Focus on delivering to the customer technology, such as internet enable mobile phones, and the provision of Mobile Internet services Europe view: Lifestyle consideration

In USA
Focus on the use of palm computers, other mobile devices (e.g. the BlackBerry mobile E-mail devices), and other wireless technology to improve the effectiveness of business systems process USA view: Support mobile working
M-Commere Strategy 46

The growth of spread of M-commerce

(Elliott, Phillips, 2004 )

Innovations:
Developments in mobile wireless application and technologies

Adoption:
Proliferation and use wireless technologies by (potential) customers

Increased competition:
Desired by organizations to expand markets and added value to products and services

M-Commere Strategy

47

Kodama, 2003

M-Commere Strategy

48

Q&A
Global Competition Convergence Location Base Time Critical Personalize Killer Application
M-Commere Strategy 49

Reference
2004 Elliott, G.; Phillips, N., Mobile Commerce and Wireless Computing Systems, Pearson Educations Limited, England. 2004. Kavassalis, P., Spyropoulou, N., Drossos, D., Mitrokostas, E., Gikas, G., & Hatzistamatiou, A. (2003). Mobile permission marketing: Framing the market inquiry. International Journal of Electronic Commerce, 8(1), 55-79 Collis, D., Carrier Grade Voice over IP, McGraw-Hill, Second Edition, 2003. Zue, V., Pervasive Computing for a Nomadic Lifestyle, 2004 2004. Balasubramanian, S., Peterson, R.A. and Jarvenpaa, S. L., Exploring the Implications of MCommerce for Markets and Marketing, Journal of the Academy of Marketing Science, Vol. 30, No. 4, Fall 2002, pp.348-361. Rao, B. and Minakakis, L., Evolution of Mobile Location-based Services, Communications of The ACM, December 2003, Vol. 46, No. 12, pp.61-65. -84. Barnes, Stuart J. And Huff, Sid L., Rising Sun: iMode and the Wireless Internet, Communications of The ACM, Nov.2003, Vol. 46, No. 11, pp. 79-84. Bane, P. W., Bradley, S.P. and Collis, D. J. The Converging Worlds of Telecommunication, Computing, and Entertainment, in Bradley, S. P. and Noland, R. L. eds., Sense and Response: Capturing Value in the Internet Era, Harvard Business School Press, Boston, MA., 1998. Barnes, Stuart J. The Mobile Commerce Value Chain: Analysis and Future developments, International Journal of Information Management, 22, 2002, pp.91-108.
M-Commere Strategy 50

Reference
MacDonald, D. J. NTT DoCoMos i-mode: Developing win-win relationships for mobile commerce In B. E. Mennecke and T. Strader, Eds., Mobile Commerce: Technology, Theory and Applications, Idea Group Publishing, Hershey, 2003, 1-25. Kodama, M. Strategic community-based theory of firms: case study of NTT DoCoMo, Journal of High Technology Management Research, 14, (2003), pp. 307-330.

Reference Web Sites:

[1]http://nobelprize.org/physics/laureates/1909/marconi- bio.html [2]http://www.medialab.sonera.fi/workspace/JukkaHelin3GinJapanOct 2002.pdf [3] http://users.ece.gatech.edu/~jxie/4G/ Mobility Management in 4G Wireless Systems. [4] http://www-306.ibm.com/software/pervasive/index.shtml [5] http://www-306.ibm.com/software/pervasive/module/index.shtml [6] http://www.nttdocomo.com
M-Commere Strategy 51