OXFORD, United Kingdom-While the drive to implement Internet e-commerce is being hyped almost on a daily basis, with some justification, as the way forward for almost all future business transactions, the possible success of this application within the mobile world remains less than clear.
Many aspects of mobile e-commerce, from handset functionality to which service to offer subscribers, remains a matter of heated debate within the cellular industry. This uncertainty is seemingly based around the newness of the technology, concern over end-to-end transaction security, how users might respond to these services and the complexity of working with external content and service suppliers.
This concern has not been helped by a number of European banks admitting their disappointment with the current return on investment (ROI) from their on-line financial services. This industry, which has devoted considerable time and money setting up these services, is complaining that while first impressions indicated consumer adoption should be high and ROI easily achieved, fewer than 10 percent of their customers are using the services and the prospects for closing conventional branch offices has not proved possible.
However, this uncertainty has not stopped cellphone operators from conducting trials of mobile e-commerce and, in the case of France, commercial service. French mobile operator Cegetel/SFR launched commercial service this spring using technology developed by Alcatel. Other operators are expected to follow this lead shortly, offering a variety of services based on differing technologies.
Alcatel’s marketing manager for cellular mobile data, Francis Sykes, confirmed that the vast majority of cellular operators are planning to launch e-commerce services. However, from a handset perspective, Sykes admitted the industry seems unsure which way the market might go.
“Small-screen handsets can display an e-mail, and consumers might be excited by this feature when seen at a retail outlet or exhibition, but they quickly become frustrating … in every day use,” said Sykes. “They might be OK for short, accurately targeted services such as the original U.K.-based Barclaycard/Cellnet trial where subscribers inquired on bank balances and other simple transactions.”
At the other end of the handset spectrum-all-in-one smartphones-Sykes believes that even with the very latest models unveiled at the GSM World Congress and CeBIT, no manufacturer has yet achieved the right form factor to achieve widespread market adoption. “We have gone into one-piece smartphones with the One-Touch-Com device, but we still haven’t found the right formula.”
The industry also must still agree on how to resolve the conflict of services based on handsets with smart cards or rival cellphones with Internet capability. The smart-card approach has an established track record, and handsets that can support dual cards, such as Motorola’s StarTAC-D, are being trialed by France Telecom.
Joachim Hoffmann, Motorola’s Europe, Middle East and Africa business director of mobile commerce, said the smart-card approach provides users with added ease of use and better functionality.
“With France Telecom, the cellphone subscriber will conduct purchasing negotiations with the seller using conventional voice,” said Hoffmann. “When a deal is agreed, the seller sends an SMS confirmation which lists the items and details the price, etc. The subscriber can accept the order by simply inserting the smart card into the dual slot StarTAC-D and pressing OK-very similar to how it would be done in a shop.”
However, Hoffmann accepts that handset manufacturers adopting the smart-card approach will need to evolve to also provide support for Internet access based on the Wireless Application Protocol (WAP), an Internet-compatible, network-independent protocol optimized for wireless use.
“In the future, smart cards will co-exist with WAP and you will see both technologies in the cellphone. It makes sense to combine WAP with dual-slot smart-card cellphones, but whether this will be true for all cellphones I’m not sure,” admitted Hoffmann.
The idea of including an Internet browser on a WAP-enabled cellphone is quickly gathering pace. One of the pioneers in this technology is U.S.-based Phone.com (formerly Unwired Planet), which has developed a “very thin client” for the handset and an application platform to support services provided by the cellular operator.
According to David Corfan, Phone.com’s European technical manager, cellphone browsers are becoming less of an optional extra and more of a necessity.
“This is something that’s only started to be accepted over the last couple of months. If you are releasing a handset next year, then it will have a browser,” he predicted. “This will, in the longer term, push handsets into some form of standardization with them using a common operating system (OS)-as evidenced by what Microsoft with CE, 3Com with Palm and Symbian are trying to do.”
Corfan claimed that, with a standard handset OS, developing downloadable services becomes much easier. He said handset manufacturers are looking in this direction, which could ultimately make the device more like a portable computer.
But again, Corfan seemed unsure whether this type of handset will be a mass-market product. “There is a question as to how far these handsets will come down market-EPOC-based handsets would enable you to download applications, but will this functionality come down to cheap handsets?” EPOC is the name given by the Symbian consortium to its operating system targeted for use with smartphones and handheld PCs.
The discussions over which handset technology will suit the sophisticated or low-cost market remains undecided.
This is also true of what services the consumer will adopt.
There is agreement that the appeal of a particular service will most likely be different in each country-with mobile gambling being seen as the single, most common e-commerce application with international potential.
However, operators have a slightly different agenda: customer retention. If they can entice users to partake of a service, other than voice, then the reason for the customer to remain with that operator is markedly higher. What is being considered by most operators is the simple provision of e-mail. This could provide low-end users with their first step onto the e-mail ladder.
