Mobile commerce

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Mobile Commerce (also known as M-Commerce, mCommerce or U-Commerce, owing to the ubiquitous nature of its services) is the ability to conduct commerce, using a mobile device e.g. a mobile phone (cell phone), a PDA, a smartphone and 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."^[1]

[edit] History

Mobile commerce was born in 1997 when the first two mobile phone enabled Coca Cola vending machines were installed the Helsinki area in Finland. They used SMS text messages to send the payment to the vending machines. In 1997 also the first mobile phone based banking service was launched by Merita bank of Finland also using SMS.

In 1998 the first digital content sales were made possible as downloads to mobile phones when the first commercial downloadable ringing tones were launched in Finland by Radionlinja (now part of Elisa)

In 1999 two major national commercial platforms for m-commerce were launched with the introduction of a national m-payments system by Smart as Smart Money in the Philippines and the launch of the first mobile internet platform by NTT DoCoMo in Japan, called i-Mode. i-Mode was revolutionary also in offering a revenue-sharing deal where NTT DoCoMo only kept 9% of the content payment and returned 91% to the content owner.

Mobile commerce related services spread rapidly in early 2000 from Norway launching mobile parking, Austria offering mobile tickets to trains, and Japan offering mobile purchases of airline tickets.

The first conference dedicated to mobile commerce was held in London in July 2001 and the first book to cover m-commerce was Tomi Ahonen's M-profits in 2002. The first university short course to discuss m-commerce was held at the University of Oxford in 2003 with Tomi Ahonen and Steve Jones lecturing.

PDAs and cellular phones have become so popular that many businesses are beginning to use m-commerce as a more efficient method of reaching and communicating with their customers. Although technological trends and advances are concentrated in Asia and in Europe, Canada and the United States are also beginning to experiment with early-stage m-commerce.

The less price sensitive early adopters from the 13-25 age group could drive the initial growth. Growth in mobile products such as ringtones, games, and graphics may displace spending on many traditional youth products such as music, clothing, and movies. This would radically change the dynamics of all visual entertainment and product-service distribution world wide so marketers could target end-users with diverse youth mind sets. The youth market has historically shown rapid viral growth which later gains acceptance in the mass market. While emerging markets are proving to be the ideal solution for sustaining revenues in the face of falling ARPU average price per unit, analysts say the rapid commercialization of 3G services is likely to open up new opportunities in developed markets.

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 and ways to reach them. Using Bluetooth technology, smart phones offer fax, e-mail, and phone capabilities.

"Profitability for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Burchett. Perennial early adopters, such as the youth market, which are the least price sensitive, as well as more open to premium mobile content and applications, must also be a key target for device vendors.

[edit] Products and services available

[edit] Mobile ticketing

Tickets can be sent to mobile phones using a variety of technologies . Users are then able to use their tickets immediately by presenting their phones at the venue.

Tickets can be booked and cancelled on the mobile with the help of simple application downloads or by accessing WAP portals of various Travel agents or direct service providers.

Mobile ticketing for airports, ballparks, and train stations, for example, will not only streamline unexpected metropolitan traffic surges, but also help users remotely secure parking spots (even while in their vehicles) and greatly facilitate mass surveillance at transport hubs.

[edit] Mobile vouchers, coupons and loyalty cards

Mobile ticketing technology can also be used for the distribution of vouchers, coupons and loyalty cards. The voucher, coupon, or loyalty card is represented by a virtual token that is sent to the mobile phone. Presenting a mobile phone with one of these tokens at the point of sale allows the customer to receive the same benefits as another customer who has a loyalty card or other paper coupon/voucher. Coupons may be sent to a customer utilizing location based services when he is in a certain physical proximity (e.g. passing by the store). Mobile delivery enables:

economy of scale
quicker and easier delivery
effective target marketing
privacy-friendly data mining on consumer behaviour
environment-friendly and resources-saving efficacy

[edit] Content purchase and delivery

Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones, wallpapers, and games for mobile phones. The convergence of mobile phones, mp3 players and video players into a single device will result in an increase in the purchase and delivery of full-length music tracks and video. Download speeds, if increased to 4G levels,will make it possible to buy a movie on a mobile device in a couple of seconds, while on the go.

[edit] Location-based services

Unlike a home PC, the location of the mobile phone user is an important piece of information used during mobile commerce transactions. Knowing the location of the user allows for location based services such as:

local maps
local offers
local weather
people tracking and monitoring

[edit] Information services

A wide variety of information services can be delivered to mobile phone users in much the same way as it is delivered to PCs. These services include:

news services
stock data
sports results
financial records
traffic data and information

Particularly, more customized traffic information, based on users' travel patterns, will be multicast on a differentiated basis, instead of broadcasting the same news and data to all Users. This type of multicasting will be suited for more bandwidth-intensive mobile equipment.

[edit] Mobile banking

Banks and other financial institutions are exploring the use of mobile commerce to allow their customers to not only access account information, but also make transactions, e.g. purchasing stocks, remitting money, via mobile phones and other mobile equipment. This service is often referred to as Mobile Banking or M-Banking. More negative issues like ID theft, phishing and pharming are lurking when it comes to mobile banking, particularly done on the mobile web. Net security technology free from redundancy and paradigm shifts away from mobile web-based banking will be an optimal solution to mobile banking in the near future.

[edit] Mobile Banking in the world

This part of the mobile commerce is very popular in countries where most of their population is unbanked.
Countries like Sudan, Ghana and South Africa reacted well to this new type of commerce.
In Latin America countries like Uruguay, Paraguay Argentina, Brazil, Venezuela, Colombia, Guatemala and recently Mexico started with a huge success.
In Colombia was released with Redeban
Guatemala have the support of Banco industrial
And Mexico released the mobile commerce with Omnilife, Bancomer and a private company.

[edit] Mobile brokerage

Stock market services offered via mobile devices have also become more popular and are known as Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and irrespective of their physical location.

[edit] Auctions

Over the past three years mobile reverse auction solutions have grown in popularity. Unlike traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid. Many mobile PSMS commerce solutions rely on a one-time purchase or one-time subscription; however, reverse auctions are high return applications as they allow the consumer to transact over a long period of time.

[edit] Mobile purchase

Mobile purchase allows customers to shop online at any time in any location. Customers can browse and order products while using a cheap, secure payment method. Instead of using paper catalogues, retailers can send customers a list of products that the customer would be interested in, directly to their mobile device or consumers can visit a mobile version of a retailers ecommerce site. Additionally, retailers will also be able to track customers at all times and notify them of discounts at local stores that the customer would be interested in.

[edit] Mobile marketing and advertising

Mobile marketing is an emerging concept, but the speed with which it's growing its roots is remarkable. Mobile marketing is highly responsive sort of marketing campaign, especially from brands’ experience point of view. And almost all brands are getting higher campaign response rates ^[2]. Corporations are now using m-commerce to expand everything from services to marketing and advertisement. Although there are currently very few regulations on the use and abuses of mobile commerce, this will change in the next few years. With the increased use of m-commerce comes increased security. Cell phone companies are now spending more money to protect their customers and their information from online intrusions and hackers.

[edit] Mobile Commerce's Influence on Youth Markets

The hierarchy of mobile media is changing very rapidly and mobile WiMax or other technologies may increase the impact of, for example, location-based mobile eCommerce. As of 2007 many companies have been trying to penetrate this market. Early pioneers in this new Mobile advertising are companies such as Vodafone, Orange France Telekom, SK Telekom and several others. Three memetic researchers and early pioneers of mobile advertising are Leveious Rolando, John Sokol and Gibran Burchett with their early experimentation of DVB-H in 1999 with SONY BMG's group Wu Tang. In 2007 on a trip to South Korea Leveious created a Venn-diagram model of rapid youth life style/trends. The diagram made explained the vital aspects of mobile adoption and sales of mobile global products/services in the mobile space. They performed an experiment in which the use of viral mobile marketing within the context in the form of mobile commercials or mobisodes were created to attract an audience and retention. The two tested a theory of rapid memetic dissemination. By observing the youth cultural styles and trends combined with the rate at which they passed on particular information given to the test subjects. Group A subjects were given words and phrases and meeting points to be used regularly in conversation. The other group the control group produced a random sampling that provided a measure of the rate at which ideas and phrases were transmitted.

Other experiments he conducted would take place in Europe-South Korea and Japan involving viral straight to the end-user mobile integrated campaigns for the delivery of products and coupons with instant savings from Mobile hand-held devices. This was commissioned by top Mobile providers like Deutch Telekom (German T mobile) and Orange with music artists -Djs and Mobile youth street teams that not only drove instant purchases of event tickets sales but also drove the sales of purchase of three different viable youth products to over 200,00 thousand end-users in 8 days. This test showed how the Global youth mobile market can react autonomously and create trends. It also showed how products-applications take on new life because of youth mindsets who are the early adopters of any form of social engaging technology services. Leveious Rolando along with Gibran Burchett researched fashionable products in order to engage the end-consumer 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.

Other notable places where mobile devices are being used to conduct mobile commerce heavily is South Korea. Through using Bluetooth technology, smart phones offer fax, e-mail, and phone capabilities mobile companies in South Korea believed that mobile technology would become synonymous with youth life style. This was based on generations of South Koreans driving content back and forth world wide including music to drive the mobile market. "Profitability for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Burchett. "Perennial early adopters, such as the youth market, which are the least price sensitive, as well as more open to premium mobile content and applications, must also be a key target for device vendors this was discuss by both Leveious Rolando and Gibran Burchett at a Mobile Commerce meeting in Japan August 2007. The early worked was transformed through dissemination they are along with few others have developed methodology to be deployed global through concerts and events and any form of youth related culture from South Korea to Japan to Europe,America in 2008 with world leading mobile software provider and world leading mobile prodvider. companies such as European giant www.orange.com and www.overcell.com and world leading personal mobile software provider www.vidiator.com and other companies in South Korea, Japan and Britain, Germany lead this evolutions of Mobile advertising.

[edit] Payment methods

The main payment methods used to enable mobile commerce are:

premium-rate calling numbers,
charging to the mobile telephone user's bill or
deducting from their calling credit.
registration of a credit card that is linked to a SIM card.

[edit] References

^ page 33, Tiwari, R. and Buse, S. (2007): The Mobile Commerce Prospects: A Strategic Analysis of Opportunities in the Banking Sector, Hamburg: Hamburg University Press
^ Increasing Trends Of Mobile Marketing

Tiwari, R. and Buse, S. (2007): The Mobile Commerce Prospects: A Strategic Analysis of Opportunities in the Banking Sector, Hamburg: Hamburg University Press.
Increasing Trends of Mobile Marketing
Tiwari, R., Buse, S., and Herstatt, C. (2006): From Electronic to Mobile Commerce: Opportunities through Technology Convergence for Business Services, in: Asia Pacific Tech Monitor, Vol. 23, No. 5 (Issue: Sept-Oct. 2006), pp. 38-45, New Delhi. [1]
Troutman, M., Timpson, S. (2008): "The Transition from eCommerce to mCommerce," Journal of Interactive Advertising [2]

[edit] See also

[0] 33, Tiwari, R. and Buse, S. (2007): The Mobile Commerce Prospects: A Strategic Analysis of Opportunities in the Banking Sector, Hamburg: Hamburg University Press

[1] Increasing Trends Of Mobile Marketing

[1]

[2]