introduction to m-commerce

M-COMMERCE
an introduction

last updated 2008 March 31

This web page has audio clips - just click on the icon (like the one to the left) and you can hear Prof. Richardson's voice adding additional information to topics on the page.

turn on your speakers to hear audio clips

This page used in the following courses taught by Prof. Richardson
.

MGT D06
~~CCT 322~~
MGD 415

BCS 555
MRK 410 / MRK 619

LEARNING
OBJECTIVES

After completing reading this unit, and listening to the lecture in class, student will have information about:

    o The evolution and adoption of mobile computing
    o The convergence of wireless devices and the Internet creating
          a new channel to market
    o Some benefits of M-commerce
    o Feasibility of M-commerce
    o "convergence" driving wireless and m-commerce - three converging trends
    o Drivers, Limitations, and Different Applications of M-Commerce
    o Physical Limitations of mobile devices, which need to be addressed
    o Bandwidth and handset design limitations
    o the technology, GSM, CDMA, SIM etc.
    o What does wireless mean to the human experience?
    o Who are some of the early players in the wireless web access developments?
    o M-commerce hype: The fact that m-commerce has not taken off too fast
    o Who's Making Money in Wireless?

WTGR

http://people.senecac.on.ca/tim.richardson/audio/audiocommentKoreanMcommerce.mp3

Sol L. was a student in MGD415 at UTM in March 2008. Click on Sol's image to hear his comments, in Korean, providing an intro to the concept of m-commerce

The origins
and growth
of mobile and
wireless
commerce

From a White Paper on Personification's web site
the url was http://www.personification.com/Visual/White/mobilecomp.html

"The rapid growth in mobile telephony in recent years provides a strong model for the adoption of undeterred mobile computing...Nokia estimated that there will be a billion mobile phone subscribers worldwide by 2005.(proven true by the end of 2006, there is now 1 billion cell phone accounts worldwide) The rapid transition from fixed to mobile telephony will almost certainly be followed by a similar transition from fixed to mobile computing in the near future.
Some of the key factors that are driving the evolution and adoption of mobile computing applications is a consequence of:

greater reliance on computing and communication technologies. audio
societal shifts toward a more mobile workforce audio
increasing need for remote communication, computing and collaboration
greater geographical mobility among corporate individuals
greater need for communication and collaboration at all levels
greater criticality of time and effective decision making within narrow windows of opportunities audio
increasing availability of wireless connections at affordable rates audio
new and important requirements for mobile computing support such as

intelligent mobile agents

and mobile knowledge networking."

Permission to use this material for Prof. Richardson's e-commerce courses was given by Dr. Mark Chignell in 2000. In 2003 Personification software technology was acquired by 483330 Ontario Inc.

The origins
and growth
of mobile and
wireless
commerce

Personification Inc. notes that mobile computing is the fourth wave of an ongoing computing revolution. It follows the earlier mainframe, minicomputer, and microcomputer waves.

Personification Inc. is a Toronto based company involved in ..."humanizing knowledge acquisition" .. as their site said in 1999

Many of the professional service firms, such as the accounting firms, law firms and management consulting companies have addressed m-commerce in the PR material on their websites. PricewaterhouseCoopers had a particularly good note on m-commerce since it addresses the all encompassing aspects of its effect on all business categories.
WTGR

"The convergence of wireless devices and the Internet is creating an important new channel to market — and the next wave of change across industries. Mobile business, or m-business as it has come to be known, will enable organisations in every industry to

expand their markets,
improve their service and
reduce their costs.

Much of the discussion surrounding m-business has been narrowly focused on m-commerce, a subset of m-business that involves the use of mobile devices for marketing, selling and buying products and services over the Internet, "third-generation" (3G) networks or other supporting technologies. But we believe that m-business is a far greater and more complex phenomenon — one that will build on organisations' e-business transformations and capabilities and provide the backdrop for a further qualitative shift in business operations. "

formerly at www.pwcglobal.com/extweb/mcs.nsf/docid/CD62BE635F4F749C852569DD0054B892

Benefits of M-commerce


			You L., Fei Z., Rohit V. of MRK 410 in March 2004 found this article on the Toshiba site that lists benefits and the feasibility of M-commerce.

from http://eu.computers.toshiba-europe.com
"M-commerce promises to make shopping easier, more personal and, perhaps, even save consumers time and money"

Some benefits of M-commerce such as:

Usability: Simplicity is key.
Convenience and Cost Benefits.
Personalisation and Privacy
Security

Benefits of M-commerce

Toshiba explains
Feasibility of M-commerce:

"Given the recent tendency to over-hype the promise of wireless technologies and 3G mobile networks, many consumers are sceptical when it comes to predictions about how m-commerce will transform their lives. According to some IT experts, in the future, consumers will be able to shop using a handheld computing device, PDA, wearable computer or mobile phone. In virtually any place – malls, restaurants, hotels, airports and other locations – this user will be able to receive coupons, download information, receive sales offers, and perform credit card transactions. In such future scenarios, m-commerce means that customers can shop anywhere, anytime."

M-commerce

2007

Andrew Burger wrote in
E-Commerce Times in January 2007 a three part article titled
"M-Commerce Market on the Move"

E-Commerce Times explains
"Part 1 [ ecommercetimes.com/story/55471.html ]
of this three-part series discusses how advances in the delivery of multimedia content to mobile devices are spurring a revolution in digital audio and video distribution and rights management."

"Part 2 [ ecommercetimes.com/story/55554.html]
outlines the revolution taking place among telecom, cable, computing and media companies as they battle for a share of the fast-growing mobile voice, data and multimedia markets."

Part 3 [ ecommercetimes.com/story/55656.html ]
Problems: "For all the promise and potential rewards of m-commerce, there are any number of challenges still to be met and kinks to be worked out. Digital rights management continues to be a divisive issue. Major telecom providers continue to resist and restrict opening up their networks to content from third-party distributors and aggregators, although this is changing."

M-commerce

2007

WTGR's analysis of M-commerce in 2007.

All the opportunities cited in 2006, 2005 and 2004 have had to deal with one giant problem

Too Many Different Devices

You can refer to it is Device Profusion if you like fancy terms, (a term used by Andrew Burger in Jan 2007) but the bottom line is that there are too many players trying to get in on the action, and as a consequence it is tough for companies to try and develop software and hardware that allows a user to use several devices in an interconnected way.

"It seems that in its new life, wireless is facing fewer technological changes and a greater number of business and marketing issues. The industry has followed a tradition of "overpromising and under-delivering," Yankee Group analyst Roger Entner said.

I (WTGR) see the future solution depending on marketing, not technology: ... meaning that successful companies, good at marketing, will (in a Darwinian way) survive, and weaker companies, products, systems will die out.

M-commerce

2007

This competitive winnowing out process is necessary in order to minimize the variety of devices and platforms. Vendors can then, more easily, achieve economies of scale by making fewer varieties of a product, and producing larger numbers. The process will allow the few companies left to reap enough profit to sustain their growth.

Imagine that the format for VCR's was not just VHS, but instead there were 10 different formats. Imagine movie studios having to produce their movies in 10 different VCR format's - it would be too expensive and only the top movies would be issued in multiple different formats.

But, since there is one format, it means when you are making a movie, and it comes time to produce the physical product to sell (the VHS cartridge) , you only have to have one format, VHS. This simpler environment encourages many people to make movies because the cost of making the cartridge is not overly expensive since it does not require multiple formats.

The rationale, just explained above, is why the manufacturers of DVD players developed a consortium in 1995 ( www.dvdforum.org/about-mission.htm ) to make sure that the format for DVD would be standard for all manufacturers. Some have suggested that this convenience has led to an explosion in the movie industry because movies can be made simply by burning one type of file format - which makes it reasonably cheap to mass produce copies of a movie for distribution and sale to the public.

M-commerce

2007

The reason for using the allegorical story of VCRs and DVDs re: m-commerce is because the DVD industry (2006-2007) is facing a new problem, similar to the m-commerce challenge of device profusion.

"Hollywood has been unable to decide between two new formats, Blu-ray and HD DVD. Tens of billions of dollars in potential sales hang in the balance." reported Ken Belson of The New York Times when he wrote about the challenges of different DVD formats for High Definition DVD.

Belson explains "...the studios are split over which group to support. Sony's studio and Disney, with 39 percent of the DVD market, back the Blu-ray group, which includes Sony, Panasonic, Hewlett-Packard and others. Warner, Universal and Paramount, with 43 percent of the market, support the HD DVD standard developed by Toshiba and NEC."

Another business source discussing "convergence" driving wireless and m-commerce.

"If the "wireless" future" is behind schedule, analysts say three converging trends

increasing use of the internet
handheld devices
cellphone services

have set the stage for a wireless explosion

Profitguide says in their April 2001 issue
"the real question is not will wireless impact your firm - or when - but how?"

KEY
POINTS

So, instead of searching for, and reading many articles talking about the coming boom in wireless business - let's accept it will, and concentrate on how it will effect business.

One of the things we have to look at is the physicality of the technology.
WTGR

permission to quote from PROFITguide magazine given by Editor Ian Portsmouth by email 2004 Dec 07. Copy of email kept on file in permissions binder.

Drivers and Different Applications of M-Commerce

Maria F., Craig S., Daniela S. of MRK410 Found this information on M-Commerce from the University of Nevada at Reno

Drivers

"The major drivers are large number of users of Mobil devices, especially cell phones. Using a cell phone is becoming a culture in some places. Prices are declining, venders are pushing it, and EC is growing rapidly. Commerce is driven by its characteristics and attributes."

Different Applications

Finance and Applications

"Many Ec applications in the service industry, such as banking, travel, stocks, and more can be conducted with wireless devices. Shopping can be done from mobile devices, too."

Intrabusiness Applications

"Large number of Intrabusiness applications, including inventory management, sales force automation, wireless voice, job dispatching, wireless office, and more are evident inside organizations"
.
.

Physical Limitations
of mobile devices,
which need to be
addressed before
m-commerce can
fully develop

. .

"Wireless devices and the current wireless technologies still present many obstacles to m-business Wireless services are not available everywhere"
Deitel p. 153

wireless Internet service is still relatively expensive audio
limited bandwidth restricts data that can be sent audio
small screens make it difficult to browse the Web audio
wireless devices have smaller memory capacity audio
wireless devices have less powerful processors audio

Physical Limitations
of mobile devices

"Wireless devices demand new models of information delivery and knowledge management," says Dr. Mark Chignell, CTO of Personification Inc. and head of the Interactive Media Lab at the University of Toronto. http://imedia.mie.utoronto.ca/

KEY
POINTS

The physical limitations for humans to see a lot of data [text and images] on a small screen, which is presently the configuration for cell phones, requires that

the data has to be abbreviated so it will fit on the screen
the data has to be altered so it can be received more effectively through the handset

suggestions for altering the data include converting text on pages to audible content so it can be listened to through the earpiece of the cellphone instead of viewed on the small screen

Physical Limitations
of mobile devices

To allow more data to be viewed on the cellphone screen, Personification has developed 2 technologies, namely TextSummary and PhoneSummary

"TextSummary uses state-of-the-art algorithms to analyze a document's structure, grammar and keywords generating a coherent summary of the original - without compromising its meaning.
PhoneSummary takes the data generated by TextSummary and converts it to voice. Any web content can be summarized and delivered in audio format through a telephone."

Physical Limitations
of mobile devices

"The mobile Internet market is growing quickly, but bandwidth and handset design limitations mean the wireless experience won't match the desktop experience any time soon."

Matt Friedman writing in the Plesman publication, Computing Canada, Nov 2000 (still true in 2006)

Friedman notes that "the mobile market is growing quickly... Sales of Internet-equipped phones are skyrocketing, while sales of PDAs are expected to double over last year's. There will soon be a vast, mobile Internet-equipped market hungry for content and services."

however, despite this trend, Friedman cautions "...You can't build much of a display into a mobile phone without seriously compromising its portability, and unlike computers, most mobile devices are designed to be operated with one hand.... The killer app for the wireless Internet may not be traditional Web browsing at all — at least not in the short term — but direct, person-to-business electronic commerce. In effect, the wireless device becomes a combination of interface, credit card, smart card and ATM."

Computing Canada is published by The Transcontinental ITBusiness Group
© by The Transcontinental ITBusiness Group. permission to quote comes from Joe Tersigni, Publisher, IT Business Group, www.plesman.com.. Copy of email kept on file in the permissions binder.

KEY
POINTS

In reading articles like Friedman's, it should make you aware that many things in the mobile market are undecided at present - there is no certainty as to what technology will be applied, will it be WAP, or something coming after WAP, and it is not certain what customers (the ultimate "voters") will want to do with the new options.

What you should keep in mind in evaluating such articles is the outstanding question of what the customer will want to do with the features that become available. Just because you can add a lot of features to a cell phone doesn't mean people will want to use those features, they may be drawn into separate devices such as the PDAs instead of clogging up the cell phone with too many FABs.

Audio - failure to consider the marketing aspects of a watch

KEY
POINTS

In class we may have a conversation about how humans try to develop technology and systems that strives to replicate, as much as possible, the true human experience, involving all senses, in communication.

We have many examples from history - humans developed the concept of the photograph to more accurately represent the human face because artists renditions were not perfect. Because humans see in colour, it was natural that humans would then develop colour photography. Since we do not see just static images, but rather moving images, it is natural that we would learn to create moving images. And since humans like to see and hear what they sense, it is logical that we would be able to add sound to moving pictures.

WTGR

What does
wireless mean
to the human
experience?

"... wireless is really about instant information, a priceless commodity that will let you make decisions and transactions anytime, anywhere"

What is instant information? (WTGR)

instant ability to see/read real-time stock quotes as the prices are moved by the market
marketing and promotion information cast to you instantly based on your geographic location in an urban area (so you can buy something in close proximity)
instant ability to reply to a human (voice, text, or image based content)

Q. Who are some
of the early players
in the wireless web
access developments?

A - Phone companies

"Wireless technology is attracting interest from virtually every industry"
Deitel p. 155

ISPs - Internet Service Providers
Mobile Phone Companies
Automobile Manufacturers

(the largest manufacturing industry)

financial services

(in Canada, a banking oligopoly assures they have lots of money)

Technological Environment

GSM
vs.
CDMA

2008

UTM student David S. in MGD415 / CCT322 in Jan 2008 emailed to suggest "a perfect example of how a business is adjusting to the Technological Environment in order to stay competitive."

David said

"I was able to apply your teachings recently when I read an online article with references to the 6 Environments Influencing Business. More specifically, the Technological Environment."

David notes
"Canadian cellular carrier, Telus Corp, is rumored to be humoring a switch to a different wireless platform. The proposed network switch would effectively move the company from it's current CDMA platform to the GSM platform. GSM provides many advantages for Telus as it is a globally used cellular technology. It would also allow cheaper roaming costs and a wider selection of mobile devices for consumers."

with info from a National Post article 2008 Jan 15
"Telus move to GSM inevitable, analysts say"
David says
"Canada's only GSM provider is Rogers Wireless. Mobile device manufacturers currently develop handsets for the GSM platform first. CDMA devices are usually an afterthought, almost arriving a year too late after their GSM counterpart had debuted. The switchover to GSM would also allow Telus to get in on much-hyped devices such as the Apple iPhone which is only available as a GSM device."

The article was at
http://www.nationalpost.com/scripts/story.html?id=238246"

Technological Environment

GSM
vs.
CDMA

2008

The contribution by David S. prompted me to have a short section on the difference between CDMA and GSM

CDMA EVDO GSM EDGE SIM

In cellular service there are two main competing network technologies:

GSM - Global System for Mobile Communications (see www.gsmworld.com )
CDMA - Code Division Multiple Access (see )

The GSM Association is an international organization founded in 1987 (in Europe) and widely used in Asia and Europe

CDMA was developed by Qualcomm in the United States, has been the dominant network standard for North America and parts of Asia

EVDO, also known as CDMA2000, is CDMA's speeded up CDMA with a downstream rate of about 2 megabits per second

EDGE (from GSM) meansEnhanced Data Rates for GSM Evolution - is rates of up to 384 kilobits per second

SIM Subscriber Identity Module (SIM) cards: "In the United States only GSM phones use SIM cards. The removable SIM card allows phones to be instantly activated, interchanged, swapped out and upgraded, all without carrier intervention. The SIM itself is tied to the network, rather than the actual phone. Phones that are card-enabled can be used with any GSM carrier."
from http://www.wisegeek.com/what-is-the-difference-between-gsm-and-cdma.htm

..
ax

What are
some
of the
products
in
m-commerce
in 2005

http://people.senecac.on.ca/tim.richardson/audio/audioalam1.wav

Alam (Oct 2005) found a page on the Palm site that is quite useful for students to view in order to get some idea of the range of m-commerce products that are currently popular, + some new products
Click on the icon below to hear his introduction and comments about the Palm site. Alam was in BCS 555.

(English)

(Bengali)

"... the shift to wireless"

April 2000 "Wireless To Dominate Web by 2001" - it didn't happen

Sept 2001 "Study: M-Commerce Faces Slow-Growth Future"

Nov 2001 "Whatever Happened to M-Commerce?"

...

M-Commerce
Hype

KEY
POINTS

The fact that m-commerce has not taken off too fast is a slap in the face to predictions based on the fact that

most everyone in urban North America had cell phones
the internet infrastructure already existed

so a combination of the 2 should develop fast - but, it hasn't !!
WTGR

.
Yankee Group mobile analyst Adam Zawel told the E-Commerce Times. "There needs to be a reason to make a purchase using your wireless device. No one's going to bother with an inferior experience on wireless when they can do it on their home PC."

KEY
POINTS

So it would seem that the key to m-commerce taking off is finding some reason to cause people to need to interact with the internet where they are standing (using their cell phone) instead of waiting til they get back to the office, or back home.

One possible killer ap is Business-to-employee applications.

Witiger suggests that a mobile workforce needing to be in touch with regional offices, and the data and information on large servers - will be one of the drivers for m-commerce - it will be considered for reasons of

cost saving
competitiveness

in terms of delivering services to clients "in the field"
WTGR

..
.On this page there are several quotes from ecommercetimes.com. Permission was given by Richard Kern, Associate Publisher of the E-Commerce Times, in an email to Prof. Richardson 2004 Dec 10th, a hard copy of the email is kept on file in Richardson's permissions binder.

witiger.com CONTACT I MAIN PAGE I NEWS GALLERY I E-BIZ SHORTCUTS I INT'L BIZ SHORTCUTS I MKTG&BUSINESS SHORTCUTS I TEACHING SCHEDULE

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MISTAKES I TEXTS USED I IMAGES I RANK I DISCLAIMER I STUDENT CONTRIBUTORS I FORMER STUDENTS I PUBLICATIONS I

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witiger.com	CONTACT I MAIN PAGE I NEWS GALLERY I E-BIZ SHORTCUTS I INT'L BIZ SHORTCUTS I MKTG&BUSINESS SHORTCUTS I TEACHING SCHEDULE
	.
	MISTAKES I TEXTS USED I IMAGES I RANK I DISCLAIMER I STUDENT CONTRIBUTORS I FORMER STUDENTS I PUBLICATIONS I
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