Report debunks early potential of wireless e-commerce

Anyone planning to make a fortune in mobile e-commerce — the new-millennium version of last year's dot-com frenzy — should think twice about where to invest their money, according to a hype-busting report from Ovum Inc., a Boston-based consulting firm.

The report discounts consumer interest in new mobile wireless services, warning wireless-wannabes to focus on business users and "genuinely unique" consumer services. Dennis Brown, co-author of the Ovum report, said that even business users "won't pay a premium for existing (wireless) services, which are easier and cheaper to access using their phone or PC . . . if suppliers are to survive and prosper in the long term, their early offerings will have to be very targeted and very compelling."

What Ovum described as a publicity "barrage . . . hyping technologies such as WAP (Wireless Application Protocol phones)" has falsely raised consumer expectations that mobile shopping will become a reality within a year. But, Brown added, "it's far more complicated than that. The industry hasn't even agreed on a framework for trusted and secure payments yet, let alone standardized its technology."

The promise of ubiquitous wireless services won't be realized until carriers roll out extensive broadband networks — a process that could take years to materialize in the U.S., the report said.

Ovum advises potential wireless players to focus on applications that play to the strength of today's mobile phones: convenience, location and personalization, such as wireless access to hotel information and reservation systems.

Ovum added that in its view, the wireless market does have "enormous upside potential," predicting that end-user spending on services will hit the $200 billion mark in 2005.

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