M-commerce key to ubiquitous Internet

Even before its inception father of the Internet Tim Berners-Lee envisaged the Web as the place where the world's population could access any amount of information from anywhere and at anytime.

Many businesses prefer to view it as a giant marketplace where they can tout for customers anywhere, any time and - if only they play their cards right - get them to buy huge amounts of stuff whether they need it or not. Sue Bushell reportsBoth motivations have some potential to drive what many hope will be the next big wave in Internet development - mobile e-commerce, or m-commerce.

Until now, steep communications costs, a paucity of applications and carrier-imposed content restrictions have all hampered adoption of m-commerce. All three impediments will have to be overcome before mobile begins to make its mark. Nonetheless, some analysts and industry players believe the next four years will see an explosion in m-commerce, fuelled mainly by three industry segments: financial services, travel, and retail.

But to say such change is just around the corner begs the question of just how far off that corner actually is. Ovum predicts there'll be 6.7 million Australian mobile e-commerce users by 2005 - some 40 per cent of all Australian mobile phone users. Funnily enough that's exactly the percentage of all e-commerce Gartner claims will be conducted via wireless devices in the next four years. And after a recent poll Information Week claimed the same 40 per cent encompassed the number of enterprises that plan to buy wireless technology products this year.

Independent Australian telecommunications analyst Paul Budde has more than a few doubts.

"Be careful about m-commerce, and the like," Budde warns. "The mobile phone will remain a phone, while other services will be value-added support services."

Insisting organisations will have to develop entirely new concepts - most particularly new value offerings to customers - before m-commerce takes off, Budde predicts mobile data offerings will only succeed in certain niche markets, mainly in the B2B arena.

"I don't expect more than 3 to 5 per cent penetration of m-commerce in the mobile market by 2005," Budde says.

Nonetheless, many market players see mobile commerce as their chance to extend Web applications to a range of mobile devices from mobile phones to PDAs. M-commerce relies on the Wireless Application Protocol (WAP), whose foundation is the XML-based Wireless Markup Language (WML) which in turn enables both the optimal use of small screens and easy navigation. By allowing Web sites to be deployed on standard Internet servers via direct data connection or via SMS (Short Messaging Service) on mobile end devices, WAP means even applications with a complex logic can be performed with plain micro-browsers running on a range of mobile devices.

Moreover WAP supports already existing or planned wireless services like SMS and GPRS as well as mobile network standards including GSM (Global System for Mobiles), CDMA (Code Division Multiple Access) and UMTS (Universal Mobile Telecommunications System). WAP sessions can be used for a large number of wireless transactions using the Internet protocol (IP) as well as other optimised protocols for which the IP cannot be applied.

As a result, WAP provides a large spectrum of wireless services independent of the underlying digital wireless network technology to provide users of mobile devices with access to a variety of services and information from interactive hotel information through securities trades to directory services, flight schedules and train timetables.

For the rest of this year at least, most businesses will be focusing their m-commerce efforts on consumer-oriented pilots and tests, with mainstream adopters not likely to start getting serious until mid next year, according to GartnerG Asia Pacific research director Geoff Johnson. Not until 2004 will the market reach maturity, with high-capability client devices and networks and mobility fully integrated with multichannel e-business strategy.

Nonetheless Johnson has a caution for businesses tending to scepticism about m-commerce's potential.

"This looks like a youth market in its adoption, but you shouldn't be dissuaded or put off by that. It may seem to be just mobile phones and cheap messaging for the under 25s, but what we're saying is you should hang in there and go the distance because it's a rich fabric and we think mainstream adopters will be doing serious things from about the middle of 2001."

Indeed, Johnson says, the business logic can be developed now and Gartner is advising its clients to do just that to get a head start in the arena.

"These are very cheap applications to develop," Johnson says. "I mean typically these things are put together in a week or two. It is very cheap and fast and easy to do on PDA type applications."

The message to the sceptics from m-commerce's most dedicated proponents is to view it less as a radical new departure and more as simply another step along the route to truly pervasive computing.

Gartner's Johnson says recently conducted draft research has elicited the concept of a wider network the research organisation is tentatively calling a Supranet.

"What we're saying is today's conventional Internet with narrow band and broadband characteristics and the wireless Web are not going to stand alone. They are going to have to be carefully integrated and you'll choose the appropriate mix of both and it is the optimising of that mix that is going to give the rich user experience. Our research agenda is very rapidly moving to describe what that optimal mix is, how you achieve it and what it looks like, the things you have to think about."

Meanwhile Dr Mark Bregman, director pervasive computing with IBM, used his keynote address to this month's Mobile Commerce World in Melbourne to stress that wireless should not be viewed as different to, separate from or a replacement for e-business. Instead it should be seen as an extension that will help drive new revenues for e-businesses.

"In the next few years there will be a proliferation of new network access devices - beyond the PC and the wireless handsets," Bregman said. "Soon set-top boxes, gaming machines, medical devices, automobiles and everyday household appliances will be embedded with intelligence and capable of connecting to content and commerce on the Web.

"This phenomenon will trigger entirely new ways of interacting with information - ranging from wireless payment systems to broadband interactive gaming - and the way it plays out will vary by geography and industry."

Huge potential

Like many of its rivals Ericsson Australia sees huge potential in m-commerce into the future. Director of marketing Darryl Joyce believes mobile computing will bring an absolutely fundamental change to the way we view commerce going forward and open up an "enormous range of commercial opportunities that will be very difficult to replicate in any other way".

"The three things that mobile brings are personalisation, because everybody's mobile service is personal. It's real-time, meaning you can be contacted in real time either to make a transaction or be offered a transaction. And it knows where you are so it can adapt according to the context you're in: whether you're at home or in the office or if you're in a particular location where there are commerce opportunities close by," Joyce says.

"Now those three things open up an enormous range of commerce opportunities that are very difficult to replicate in any other way."

And PricewaterhouseCoopers says the transition from personal computers to handheld devices and the rapid shift from wired communications to wireless will be the two big overriding themes in technology over the next three years.

Terry Retter, from PWC's management consulting services, says as wireless communications become pervasive, hand-held devices will become the norm for consumers without supplanting the PC.

Predicting four operating systems will survive: Sun's JavaOS, Microsoft's Windows CE, Palm's Palm OS and Symbian's Epoc, Retter says each will be used in multiple types of devices, including hand-held computers, mobile phones and set-top boxes.

Why would mobile data take off now, after failing to do so for the past two decades? Every key technology change in the mobile industry has promised a future of mobile data, but none has delivered - yet.

On the other hand this is the year when the infrastructure could at last start catching up with the hype.

"M-commerce is picking up, specially with Telstra moving into the banking sector," says Joel Martin, research manager IDC Australia"The biggest things people are concerned with right now are the cost, because of the time you're online, and the security of the connection - those are the two biggest impediments to mobile e-commerce.

"To overcome this, Ericsson, Vodafone and Nokia have all announced that they will be jointly deploying an industry framework which will enhance the usability of mobile e-commerce. This will focus on deploying three primary technologies: WAP, a new one called Wireless Identification Module (WIM), and a Wireless Public Key.

Gartner's Johnson concedes there won't be widespread adoption of m-commerce until there's a general packet radio system (GPRS) service in place allowing mobile users to stay continually connected without tying up enormous resources (or paying through the nose). That corner at least shouldn't be too far off - Telstra, which claimed breakthrough speeds in excess of 50Kbit/sec using a handheld computer connected to a mobile phone in field trials, plans to push GPRS through its GSM network nationwide by the end of this year.

That should simultaneously address what have until now been the two greatest barriers to adoption of m-commerce - the lack of both speed and packet-switching on mobile networks.

"By the end of this year there will be networks truly deployed and we will start to see the first handsets coming out in volume on the market like the Ericsson 520 which is a GPRS terminal and has Bluetooth and WAP as well," Joyce promises. "Once you start to see that happening there will be enormous growth."

And another enabler is just around the corner, according to Rick Wakham, head of products Telstra OnAir. Wakham says soon there will be sufficient security within the WAP environment to overcome a range of concerns, while Telstra is actively working on the issue of digital certificates.


Telstra is investing heavily in m-commerce and plans to extend that investment into the future.

"We don't see the mobile taking over from the Internet, but some applications are readily suitable for mobile applications and we'll certainly chase those down," Wakham says.

Location-based services would foster a range of applications. One suggestion is for vendors to set up your handheld or Web phone to notify you of specials being offered by merchants as you pass by their premises. Wakham concedes such services are unlikely to be in huge demand - indeed many of us would consider them a nightmare come true. On the other hand he argues some segments of the market might happily accept such services in return for lower air-time rates or a lower total bill.

Apart from such location-based services Telstra sees both micropayments and banking type applications as highly desirable for many mobile users. And as far as applications that will really start to excite the public and create widespread demand for m-commerce-type capability, ticketing is right up there towards the top of the list, Wakham says.

"Colonial Stadium (in Melbourne) has had bad publicity because people haven't been able to book tickets because the queues have been so long on the line. Wouldn't it be much easier if you could put an electronic request in through your phone?"

"Or imagine being able to walk up to a vending machine or parking meter and, rather than having to have the correct change in your pocket, being able to key in a code that will credit the amount to your phone bill.

"We will certainly see those micropayment-type applications where it's a small amount, small transaction, available this year," Wakham says.

Meanwhile an Australian company called Palm Solutions has developed a real estate application for property inspections which features downloadable property condition reports, routine inspection and bond reports. On return to the office, the user simply places the palmtop in its cradle, synchronises using the Palm Solutions Synch-Engine and the property reports are automatically generated through direct integration with a word processor, saved and optionally printed.

And Keycorp Limited is supplying Advanced Mobile Payment Terminals for Sweden Post to allow postal officers to accept customer payment for postal deliveries and monitor the number of parcels delivered each day.

Gartner says B2B and B2B m-commerce will rest on a range of services including vertically specialised news and alerts, business process status information, e-mail, maintenance alerts, CRM, mobile employee applications, field service, sales support and remote management.

B2B and C2C services meanwhile will be driven by alerts (including price) and time-sensitive news, messaging, basic location specific information and marketing as well as microsales and e-tickers and tokens.

And IDC's Martin expects heavy investment in mobile commerce by the financial institutions over the next couple of years.

"You might also see things like monitoring stocks getting a feed from your broker. But all these applications will offer only very limited interactions - you won't be keying or purchasing," Martin says.

Such applications may be yet another step on the road to realising the vision of truly pervasive computing, but the road is long and winding, and the vision today is almost as far off as ever. It remains to be seen whether m-commerce will play a definitive role in realising that dream.

Copyright © 2000 IDG Communications, Inc.

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