NEW YORK-Before mobile commerce can reach the goal of providing a value-added revenue stream for wireless carriers, it must fulfill its potential as a value-added service for their customers.
“Today m-commerce is a subset of e-commerce, and it’s having problems. It’s not taking off. You’ve read the bad press,” said Adam Zawel, senior analyst of wireless/mobile services for The Yankee Group, at the recent “E-business Conference and Expo” here.
“If m-commerce is simply mobile access to e-commerce, it will be used for low-end commodity goods and will not increase fulfillment over e-commerce.”
Despite that gloomy introduction, The Yankee Group projects that Americans will spend $50 billion by the end of 2005 for m-commerce transactions. That is based on an average of four transactions totaling $50 per month per wireless customer.
“AT&T (Wireless Services) has said it is not making money off the wireless Internet. It is making money off of voice,” Zawel said.
“The possible strategy for mobile commerce is to leverage its advantages, and voice represents a unique advantage of m-commerce, as is the multimode interface and location and contextual profiling.”
Voice print authentication on digital signal processors will accelerate the domination of voice as a killer application for wireless e-commerce, said Louis Judice, regional manager for the Hewlett-Packard Co.’s new Mobile E-Services Bazaar-Americas. Judice is based in Piscataway, N.J., while the Bazaar is headquartered in Palo Alto, Calif., and accessible over the Internet at www.cooltown.com.
“In Chapter One, I use the phone to look up train schedules. In Chapter Two, the phone tells me the next train is in 15 minutes and I’d better hurry.
“In Chapter One, I order flowers. In Chapter Two, I also get a confirmed receipt of the order and shipping status. Chapter Two of the Internet is tailor-made for mobility,” Judice said.
Expectations for m-commerce must take into account the fact that the wireline Internet took 30 years to gain widespread acceptance, said Terrance P. Julius, chief technology officer of Televend Inc., Jerusalem, Israel.
“In the United States, phones have low bandwidth. North Americans adopt new technologies slowly. They are used to voice and buttons. They are very security conscious, so they don’t want any automatic debits tied to their bank accounts,” he said.
Instead of trying to move this mountain, Televend’s strategy is to meet it head-on. The company has developed a platform offering “a lowest common denominator that works with any device, so that any phone can tie into the network of nuts and bolts-ATMs and credit cards,” Julius said.
Americans are willing to pay transaction and credit-card membership fees and to deposit money into prepaid accounts “so companies can hold the float,” he added. These consumers also need a viable way to conduct “micro and person-to-person” financial transactions.
For Julius, these small m-commerce transactions are the best way to meet the current needs of American consumers while also getting them accustomed to the general concept of m-commerce. That will provide a comfort level for a smooth segue to the second generation of m-commerce, which covers “the entire retail market and is very exciting,” he said.
Although Julius contended that the security concerns of Americans are way out of proportion to actual risk, PricewaterhouseCoopers believes those worries are legitimate, said Rudy Bakalov, its New York-based manager of technology risk services. Security, privacy, performance and liability to third parties are the four primary concerns of PWC’s clients, which include carriers like Verizon Wireless and AT&T Wireless Services, banks and start-up content providers.
“Security is getting the most attention today. Everyone is very concerned and rightfully so. If not handled correctly, this can do serious damage to the industry,” Bakalov said.
“Most carriers today do not know how to handle security from end to end. That’s the reason why many applications developers are building security into the applications instead of relying on advanced network features like PKI (public key infrastructure).”
For m-commerce to take off, customers need a much higher level of service quality than they receive today, said Mark E. Adams, chief executive officer of Mspect, Sunnyvale, Calif.
On average, 30 percent of wireless data calls are dropped. Latency lags of 15 to 25 seconds are common. Wireless Web sites often are down. Error rates in data transmission are high.
“We focus on quality of service, on pre-launch compatibility and reliability testing (of applications and content), rendering across all types of phones. I can’t say what the killer app is, but I believe QOS is a killer necessity,” Adams said.
“When wireless networks get better, the problem of latency bottlenecks will move. We think it’s interesting that a whole number of companies have become focused on latency at the T-3 lines.”
