SENECA COLLEGE, TORONTO

MRK 610   SECTION D ©
ESSENTIALS of e-COMMERCE
As Taught by Prof. Tim Richardson School of Marketing and e-Business, Faculty of Business
.last updated 2003 March 26.
 
 

"... we are on the threshold of a wireless revolution that will bring about the increasing
convergence of handheld devices and cellular phones, fundamentally altering the landscape"

Andy Walker's introduction to a Toronto Star story titled "Wireless Revolution Beckons", Walker is President of Cyberwalker Media
 www.cyberwalker.net/
 
"The biggest risk for organisations is believing that m-business opportunities are two to three years away. The pace with which businesses accept emerging technologies is accelerating.  M-business is here today, and growing at a tremendous rate. "
PricewaterhouseCoopers
 www.pwcglobal.com/extweb/mcs.nsf/docid/CD62BE635F4F749C852569DD0054B892
 
 
Handheld
devices and their
role in the
development
of
m-commerce
. Handheld devices now (Nov 2000) offer substantial computing power. Technological developments and enhancements in memory, battery life, use of compund materials to decrease weight, etc. have allowed handheld devices to become "serious" instruments in the daily life of IT professionals, business people, and "average" consumers

WTGR

.
.
 
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. The Strategis group recently estimated that there will be around 500 million mobile phone users worldwide in 2001, and 700 million by 2003. Consistent with this projection, Nokia estimated that there will be a billion mobile phone subscribers worldwide by 2005. 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 are:

  •      greater reliance on computing and communication technologies. 
  •      societal shifts toward a more mobile workforce 
  •      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 
  •      increasing availability of wireless connections at affordable rates 
  •      new and important requirements for mobile computing support such as
    •      intelligent mobile agents

    •      and mobile knowledge networking."
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 ...
http://www.personification.com
 

.
In an attempt to give us a snapshot approach to understanding the whole picture of wireless business and m-commerce, we will employ the results of a class assignment, April 2001. In this assignment, the class was divided into 2 groups. Each group was charged with creating a point form summary of all the concepts and "critical understandings" that would be necessary to have in order to deal with the new issues in wireless business and m-commerce. The emphasis is on "summary" and the team members were reminded that the purpose was not to describe in detail all the topics, but rather organize and categorize an abbreviated list of the topics and put the topics in an order which would make viewing of it, understandable and educational.

The results are below. The teams had two different approaches to this task. Both results are useful to look at as a summary of wireless business and m-commerce.
 
 
http://www.witiger.com/ecommerce/m-commercesummary1.htm http://www.witiger.com/ecommerce/m-commercesummary2.htm

 
. 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 has a particularly good note on m-commerce since it addresses the all encompassing aspects of its ffect 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. "
from
 www.pwcglobal.com/extweb/mcs.nsf/docid/CD62BE635F4F749C852569DD0054B892
.
http://www.profitguide.com/ 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?"
 

. 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

.
Physical Limitations
of mobile devices, 
which need to be 
addressed before 
m-commerce can 
fully develop
"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.
 
. 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
WTGR
.
To allow more data to be viewed on the cellphone screen, Personification has developed 2 new 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."


http://www.personification.com
 

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

 www.plesman.com/eb/news.
html?CONTENT=news/eb021124a
"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

Friedman notes that "the mobile market is growing quickly. Almost 30 per cent of Canadian households have at least one mobile phone. 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."
 

. 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 all these article 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.
WTGR

"WAP has to overcome at least two substantial obstacles before it's really ready for prime time. The first problem is that for now, digital wireless connections are limited to a glacial 9600 bits per second about a sixth the speed of a pokey 56k modem. It's unlikely that anyone would have much of an "Internet experience" at that pace. However, the bandwidth issues are sure to be solved in due course." 
.
 
"... the shift to wireless" April 2000
 

"Wireless To 
Dominate Web by 2001"
Nora Macaluso wrote in 
E-Commerce Times in April 2000 an article titled

 http://www.ecommercetimes.
com/news/articles2000/000411-3.shtml

Macaluso quoted IDC's prediction that by mid-2001 all digital cellular devices will be WAP-capable. IDC was further quoted by Macaluso as saying that the shift to wireless is driven in part by a growing trend on the part of phone service and other providers to encourage customers to use the Web for customer service, bill paying and account information. It is a logical extension for these companies to prompt consumers to buy products and services over their Internet-ready phones. 
To access the original report from IDC, written by Iain Gillot, see below.

IDC's 
 http://www.itresearch.com
/alfatst4.nsf
/unitabs/W21187?
openDocument
This report addresses current interest levels in wireless Internet access; the air interfaces, platforms, devices, portals,
 and services being used; and the information content being provided. Moreover, the major trends and future of wireless Internet access are examined, including subscribers and the transaction value of wireless Internet services.

"the mobile market is growing quickly. Almost 30 per cent of Canadian households have at least one mobile phone.[Nov 2000] 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."
 www.plesman.com/eb/news.html?CONTENT=news/eb021124a
"The truth is that there are a whole lot of cell phones and mobile devices in Canada, and they're growing rapidly," said Mark Dickelman, vice-president of m-commerce and wireless at the Bank of Montreal

.
 
bandwidth
and handset 
design 
limitations

WAP

November 2000
"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."
 
By Matt Friedman writing in 
 www.plesman.com/eb/news.html?
CONTENT=news/eb021124a

"WAP has been hyped as the be-all and end-all of the wireless Internet, but it's important to remember that it's just one of many technologies,"
Mike O'Farrell, executive vice-president for business development of Toronto-based mobile developer PCS Innovations Inc.

"... WAP has to overcome at least two substantial obstacles before it's  really ready for prime time. The first problem is that for now, digital wireless connections are limited to a glacial 9600 bits per second about a sixth the  speed of a pokey 56k modem. It's unlikely that anyone would have much of an "Internet experience" at that pace. However, the bandwidth issues are sure to be solved in due course. 

 A more serious question is whether handheld, mobile wireless devices like cell  phones and personal digital assistants are even particularly well suited to online browsing. 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."
Friedman
 

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

A - Phone companies

 

CNET had a story in December 1999 about Bell Atlantic's offering of wireless
 http://news.cnet.com/news/0-1004-200-1431602.html?tag=st.ne.ni.rnbot.rn.ni
..

http://www.witiger.com/ecommerce/m-commercekillerap.htm
..

What does 
wireless mean 
to the human 
experience?
 
 
 
 
 
 
 
 
 
 

What does 
wireless mean 
to the human 
experience?

. In class March 27th, 2001, we had 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

http://www.profitguide.com/ "... 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)
.

.

http://www.witiger.com/ecommerce/bluetooth.htm
.
m-commerce
but ...
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

m-commerce
but ...

.
When we talk about a new development in business, it is just as important to discuss the conditions under which it will be constrained, as it is to discuss the conditions under which it will flourish. Therefore we will attempt here, by reference to this article below, to put a sober side on the view that m-commerce will grow fast.
WTGR
http://www.internetnews.com/ec-news/article/0,,4_898281,00.html
The article discusses how many people consider m-commerce in an un-focused way without breaking it down into subsets. The article suggests
"m-commerce should be divided into three types, ...
  • premium content, 
  • remote payment and 
  • point-of-sale applications. 
Of those, premium content will be the most important"

This article was based on a 2001 report titled 
"Mobile Commerce in Europe: Premium Content Remains the Priority." 

.
http://www.witiger.com/ecommerce/m-commerceinternationally.htm
 .
Internet 
needs 
space 
to grow
 
 
 
 
 
 
 
 
 
 
 
 

Internet 
needs 
space 
to grow
 
 
 
 
 
 
 
 
 
 
 
 
 

Internet 
needs 
space 
to grow

. the well researched article by Tyler Hamilton in the Toronto Star

"Ubiquitous Internet needs space to grow"
 http://www.thestar.com/cgi-bin/....r/Layout/Article_PrintFriendly&c=Article&cid=990329594097
 

.
What Tyler is talking about can be analogized like this: imagine the invention of the telephone taking off very very fast, and you begin with 6 digit numbers and no area codes, but realize after a couple of years you will run out of 6 digit telephone number, and, if you switch to 7 digit numbers, to accomodate more growth, the older telephones working on 6 digits won't operate in the new 7 digit system.
WTGR

Mr. Hamilton writes a long article about the consequences of running out of IP addresses as more and more devices and facilities are connected to the internet. He begins the article by explaining the wide range of appliances and technologies that could be connected tot he Net, which would require IP addresses in order to be "contacted" and given commands.
 

"It's 2020 and, like electricity and running water, the Internet has come to power, and flows through every aspect of your life. Your personal computer and mobile phone aren't the only devices connected to the World Wide Web. Your microwave now surfs for recipes based on the ingredients in your cupboards. Your grocery orders are automatically placed online as food and drinks are taken from your fridge. Your dishwasher, before turning itself on, negotiates the cheapest energy rate for the day, thanks to a software agent known as a hydrobroker. Minivans. Air conditioners. Picture frames. Digital books. MP3 players. Palm computers. BlackBerry pagers. Smart cards. Pop machines. Motor boats.... They will all have a 24-hour, always-on connection to the Internet one day and, like the devices I mentioned above, they will all require Internet Protocol or IP addresses to identify them as unique online ``beings.''  Many experts suggest that the average person will need more than 100 IP addresses for his or her own use within the next 20 years. Herein lies the problem. The Internet, as it exists today, can't support 600 billion IP addresses. If we're lucky, it's capable of assigning 4.3 billion addresses. And if that's the case, we've already used up more than 60 per cent of the capacity, meaning we'll likely run out within the next few years. Can anybody say crisis? If you thought the Y2K bug threat was a major headache, then get ready for a migraine."

"Every device that links to the Internet needs its own IP address so that other online devices can find and communicate with it.  Today, when a device such as a laptop dials up to the Internet, it is assigned a temporary IP address for that specific online session. But in the not-so-distant future of always-on, ubiquitous Net access, most IP addresses will be permanently assigned -  kind of like a telephone number.

  ``If we don't do anything, then we have a similar problem to Y2K,'' says Latif Ladid, president of the IPv6 Forum, a global consortium of more than a 100 telecommunications carriers, Internet service providers and network equipment makers"

"The current generation, known as Internet protocol version 4, or IPv4, has been in place since 1983. It was co-created by Dr.  Vint Cerf, known affectionately as ``father of the Internet.'' Before IPv4, we had APARnet, a network of about 300 mainframe computers that was built by the U.S. government and operated between 1969 and 1983. Ladid says it's time to move forward with Internet Protocol version 6, or IPv6, in development since the early 1990s and was approved as a global standard in 1999. Soon after, Ladid founded the IPv6 Forum. The group was in Ottawa last week [2001 May] as part of a worldwide awareness tour.  As far as Ladid is concerned, if we start embracing IPv6 now, we are more likely to avoid the last-minute crunch we  experienced with Y2K."

.
.
Internet 
needs 
space 
to grow
 
 
 
 
 
 
 
 
 
 
 
 

Internet 
needs 
space 
to grow

.
Tyler Hamilton [in May 2001] is one of the first journalists in Canada to address this problem but it is possible to find reference to this "challenge" in some articles going back to 1999.
WTGR

 
. the 1999 article by Joe McGarvey of ZD Net Inter@ctive Week raises the question of IP addresses limitations and challenges faced by the IPv6 Forum

 http://www.zdnet.com/intweek/stories/news/0,4164,2349342,00.html

McGarvey explains,

"The major shortcoming of the current version of IP, IPv4, is that it is running out of available IP addresses.  Designed when the Internet was still a data-sharing  network for research facilities and the military, IPv4 was given a 32-bit addressing scheme, which was capable of assigning a few billion unique addresses. IPv6, on the other hand, is beefed up with a 128-bit addressing scheme, which enables it to spawn many more billions of additional addresses."

McGarvey notes the first meeting of the IPv6 Forum, an international advocacy group dedicated to advancing the next generation of the Internet Protocol (IP), was held in Paris in October 1999.
 

.