Chapter 19
Mobile Commerce
Prentice Hall, 2002
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Learning Objectives
Describe the characteristics and attributes of
m-commerce
Describe the drivers of m-commerce
Understand the supportive technologies and their
capabilities
Describe the wireless standards and transmission
networks
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Learning Objectives (cont.)
Describe applications of m-commerce to finance,
marketing, and customer service
Describe the intra-enterprise applications of
m-commerce
Describe B2B and supply chain applications
of m-commerce
Describe consumer and personal applications
of m-commerce
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Learning Objectives (cont.)
Describe some non-Internet m-commerce
applications
Describe location-based commerce
(L-commerce)
Describe the major limitations and
implementation issues of m-commerce
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Illustrative Examples
NEXTBUS—bus riders in San Francisco
Internet-enabled cell phone or PDA helps:
Find estimated arrival time at each stop, in
real time
Soon location-based advertisements will pop
up—you have time to get a cup of coffee
before the bus arrives—Starbuck’s is 200 feet
to the right
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Illustrative Examples (cont.)
DINE ONE ONE—home delivery from the
restaurant in the San Francisco area
100 participating restaurants
Food needs to be delivered hot
The solution
Drivers equipped with AT&T’s PocketNet
service—portable smartphones
Dispatchers locate drivers, notify where to
pick up and deliver food
Better service and driver utilization
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Illustrative Examples (cont.)
CELL PHONE SERVICES—Smart Search in
Hong Kong
Shopping guides
Maps and transportation
Ticketing
News and reports
Gambling
Personalized movie service
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Hardware Generations
Definitions
Any transaction with a monetary value conducted
via a mobile telecommunications network
Any e-commerce transaction in a wireless
environment
Can be done via
Internet
Private communication lines
Smart cards
Other infrastructures
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Hardware Generations (cont.)
Terminology and generations
1G: 1979-1992 wireless technology
2G: current wireless technology
2.5G: interim technology accommodates
graphics
3G: 3rd generation technology (2001-2005)
supports rich media (video clips)
4G: next generation (2006-2010)
GPRS: General Packet Radio Services
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Terminology and Standards
GPS: Satellite-based Global Positioning
System
GSM: Global System of Mobile
Communication
PDA: Personal Digital Assistant
SMS: Short Message Service
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Terminology and Standards (cont.)
MMS: Multimedia Messaging Service
EMS: Enhanced Messaging Service
UMTS: Universal Mobile
Telecommunications System
WAP: Wireless Application Protocol
SMARTPHONES
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Attributes of Mobile Communication
Attributes of m-commerce and its economic
advantages
Mobility—users carry cell phones or other mobile
devices
Broad reachability—people can be reached at any
time
Ubiquity—easier information access in a real-time
environment
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Attributes of Mobile
Communication (cont.)
Attributes of m-commerce and its
economic advantages (cont.)
Convenience—devices that store data and
have Internet, intranet, extranet connections
Localization of products and services—
knowing where the user is located at any
given time
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Figure 19-1
Characteristics of M-Commerce
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The Benefits
Local-based services offer advantages
Vendors and carriers differentiate themselves
in the marketplace
End users can use Web-enabled mobile phone
or PDA to access information
Instant connectivity to the Internet
Personalization is available although limited
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The Drivers
Widespread availability of devices
No need for a PC
Handset is becoming a culture
Vendors’ push
Declining prices
Improvement of bandwidth
Explosion of EC in general
Reduces the digital divide
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Mobile Computing Infrastructure
Hardware
Cellular (mobile)
phones
Attachable keyboard
PDAs
Interactive pagers
Screenphones
E-mail solutions
Other devices
Convergence
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Figure 19-2
Nokia 9290 Communicator
Source: www.nokia.com.
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Figure 19-3
Palm VIIx Handheld
Source: www.palm.com.
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Mobile Computing
Infrastructure (cont.)
Software
Microbrowser
Mobile client operating system (OS)
Mobile application user interface
Back-end legacy application software
Application middleware
Wireless middleware
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Mobile Computing
Infrastructure (cont.)
Networks and access
Wireless transmission media
Microwave
Satellites
Radio
Infrared
Cellular radio technology
Wireless systems
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Figure 19-4
Wireless System (Delta Airlines)
Source: ibm.com/software, and delta.com (2000).
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Wireless Technology,
Standards, and Security
Technology
Microbrowsers
Bluetooth
Wireless local area networks (WLANs)
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Wireless Standards
Wireless standards
Time-division multiple access (TMDA)
CDMA One
Code division multiple access (CDMA)
Wireless Application Protocol (WAP)
W-CDMA (wideband)
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Wireless Standards (cont.)
Wireless standards
Subscriber identification module (SIM)
Wireless markup language (WML)
Voice XML (VXML)
Enhanced data rates for global evaluation
(EDGE)
Universal mobile telecommunications system
(UMTS)
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Figure 19-5
Services and Applications of 3G
Source: NTT DoCoMo publicity
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Wireless Security
Wireless security issues
Viruses
Smart card security solutions
Back-end security solutions—public key
infrastructure (PKI) and M-CERT
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Voice Systems for M-Commerce
Hands-free and eyes-free operations
increase:
Productivity
Safety
Effectiveness
Disabled people can use voice data for
various tasks
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Voice Systems for M-Commerce (cont.)
Voice terminals are portable
2 ½ times faster than typing
Fewer errors
Voice portals
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M-Commerce Applications
Wireless access provided to existing B2C
applications
Existing wireless intrabusiness and CRM
applications enhanced
Location-based applications
SMS-based applications
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Mobile Financial Applications
Examples of financial applications
Swedish Postal Bank
Dagens Industri
Citibank
Japanese banks
Hoover’s wireless
(hoover.com)
ASB Bank (New
Zealand)
Charles Schwab
E*TRADE
SEB in Sweden
Micropayments—wireless Web wallet and bill
payments
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Figure 19-6
Bill Payments by Cell Phone
Source: Courtesy of Nokia at nokia.com.
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Mobile Marketing, Advertisement,
and Customer Service
Shopping from wireless devices (buy.com)
In 5-10 years most businesses will be wireless
Online stores will become showrooms
Using voice portals in marketing and customer
service
Check on delivery status while away from
office
Provide service technicians with diagnostic
information
Salespeople check on inventory status during
meeting to help close a sale
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Figure 19-7
Mobile Shopping Supported by CRM
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Mobile Marketing, Advertisement,
and Customer Service (cont.)
Targeted advertisement
Personalization of services and enhanced
user interface for wireless Web pages
Get paid to listen to advertisements
Advertisement strategies and guidelines
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Mobile Marketing, Advertisement,
and Customer Service (cont.)
GPS helps target users from their location
Vindigo.com—places to go and things to do in
your area
C5Solutions.com
Delivers location specific, personalized, specific
marketing messages to customers
Reporting capability on trends and patterns
Enterprise-ready scaleable architecture
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Mobile Marketing, Advertisement, and
Customer Service (cont.)
GPS helps target users from their location (cont.)
GeePS.com—location-based start-up sends
coupons to customers cell phones
Go2Online.com—locations-based Web
domain helps mobile travelers find anything
(e.g., the nearest oil change)
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Figure 19-8
Wireless CRM
Source: Publicly distributed information from Amdocs Corp. St. Louis,
MO (Dec. 2000).
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Mobile Applications in the Enterprise
Supporting mobile employees (enterprise
solutions)
Smartphones and hand-held devices
Employees who work on buildings and electrical
poles use wearable wireless devices
Cameras
Screen
Keyboard
Touch-panel display
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Mobile Applications in the Enterprise (cont.)
Non-Internet applications such as:
Wireless networking used for inventory picking in
warehouses
Delivery and order status updates
Service people in the field
Dispatching
Online diagnosis support from remote locations
Parts ordering/inventory queries
Salespeople connect to corporate networks
Remote database queries
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Figure 19-9
Automated Workflow Applications
Source: Copyright 2000 MDSI Mobile Data Solutions, Inc. used with
permission of MDSI.
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Mobile Applications
in the Enterprise (cont.)
Web-based applications (intrabusiness
m-commerce), some examples:
Sonera (Finland): electronic funds transfer
(EFT) of paychecks
Chicago’s United Center: inventory can be
taken in a matter of hours
FedEx and UPS: access Web, e-mail,
databases, intranets, etc.
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Mobile Applications
in the Enterprise (cont.)
Job dispatch
Transportation (food, oil, newspapers, etc.)
Taxis in Korea and Singapore
Utilities (gas, electric, etc.)
Field service (computer, office equipment)
Health care (visiting nurses, doctors)
Security (patrols, alarm installation)
Mobile sales force automation
Intelligent offices
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Figure 9-10
Intelligent Office
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Supporting the Supply Chain and B2B
Mobile supply chain integration
Both sell-side and buy-side of ERP
Unified messaging makes user’s device less of an
issue
Collaboration among members of the supply chain is
facilitated by mobile capabilities
Telemetry drives supply chain efficiency and
productivity through automation of:
Data capture
Improved billing timeliness and accuracy
Reduced overhead
Increased customer satisfaction
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Supporting Consumer
and Personal Services
Mobile games
Mobile music
Mobile video
Mobile electronic pets
Mobile betting and
gambling
Auctions
Tracking athletes
Hotels
Intelligent homes and
appliances
Wireless telemedicine
Other services for
consumers
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Figure 19-11
Intelligent Home
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L-Commerce Applications
Location-based commerce (L-commerce)—
applications are specific to user’s location
Global positioning systems—satellite-based
wireless system enables user to find their
location anywhere on earth
Geographical information systems (GIS)
and GPS
GPS on handsets
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L-Commerce Applications (cont.)
E-911 emergency cell phone calls
Wireless carriers must provide feature that allows
them to identify number and location of the user
Mobile 911 calls must be forwarded immediately to
the appropriate agency
Telematics—integration of:
Wireless communications
Vehicle monitoring systems
Vehicle location devices
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Figure 19-12
Location-Based Services Involving Maps
Source: Based on mapinfo.com
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Non-Internet Applications
Smart cards
Contactless (proximity) cards used for:
Bus and subway fares
Road tolls
Vending machines
Amplified remote-sensing cards for toll
collection
Vehicles do not have to stop at toll booths
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Limitations of M-Commerce
Usability problem
Insufficient bandwidth
Effectiveness
Efficiency
Satisfaction
Limits the extent to
which mobility can be
viewed commodity
Lack of standardized
security protocol
3G licenses
Security methodology
needs to be
incorporated in
mobile
Customer confidence
is low
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Auctioned by
governments
Certain countries
cannot be served by
these devices
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Limitations of M-Commerce (cont.)
Transmission limitations
Multipath
interference
Weather and terrain
problems
Power consumption
Bandwidth increases
Power consumption
increases
Reduces battery life
Limitations of the 2001
WAP applications
Loading times too
slow to keep users
interested
Wireless and health
hazards
Fear of radiation
Unsafe to drive and
use wireless phone
Disappointed users
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Implementing M-Commerce
Revenue models—several sources:
Basic (fixed) fees
Point-of-traffic fees
Transaction fees
Content and
service charges
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Payment clearing
Hosting fees
Certification (PKI)
fees
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Implementing M-Commerce (cont.)
Consumer confidence and trust
Customers love free or inexpensive services like
those offered by iMode
Customers not willing to pay large amounts of
money for services unless they trust the
product/vendor
Confidence should increase with reliable payment
mechanisms
Research is being conducted in this area
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Implementing M-Commerce (cont.)
M-commerce value chain
Involves many partners
Success depends on
Coordination among participants
Sufficient compensation for all
Use ASP to deliver m-commerce or
Large companies contract other vendors to
complement their services
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Managerial Issues
Timing—careful m-commerce strategy
Which applications first?
Location-based advertisement may be attractive,
but its effectiveness is unknown
Care should be taken in committing sources to mcommerce; but, don’t miss the boat
Which system to use?—multiplicity of:
Standards
Devices
Supporting hardware and software
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