Mobile commerce

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Mobile Commerce, also known as M-Commerce or mCommerce, is the ability to conduct commerce using a mobile device, such as a mobile phone, a Personal Digital Assistant (PDA), a smartphone, or 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]

History

The Global Mobile Commerce Forum, which came to include over 100 organisations, had its fully minuted launch in London on 10 November 1997. It was founded by Logica and Cellnet. The meeting was opened by Dr Mike Short, former chairman of the GSM Association, with forecasts from Kevin Duffey (Group Telecoms Director of Logica) and Tom Alexander (later CEO of Virgin Mobile and then of Orange).

Mobile commerce was born in 1997 when the first two mobile-phone enabled Coca Cola vending machines were installed in the Helsinki area in Finland. The machines accepted payment via SMS text messages. The first mobile phone-based banking service was launched in 1997 by Merita Bank of Finland, also using SMS.

In 1998, the first sales of digital content as downloads to mobile phones were made possible when the first commercial downloadable ringtones were launched in Finland by Radiolinja (now part of Elisa Oyj).

Two major national commercial platforms for mobile commerce were launched in 1999: Smart Money (http://smart.com.ph/money/) in the Philippines, and NTT DoCoMo's i-Mode Internet service in Japan. i-Mode offered a revolutionary revenue-sharing plan where NTT DoCoMo kept 9 percent of the fee users paid for content, and returned 91 percent to the content owner.

Mobile-commerce-related services spread rapidly in early 2000. Norway launched mobile parking payments. Austria offered train ticketing via mobile device. Japan offered mobile purchases of airline tickets.

In April 2002, building on the work of the Global Mobile Commerce Forum (GMCF), the European Telecommunications Standards Institute (ETSI) appointed Joachim Hoffmann of Motorola to develop official standards for mobile commerce. In appointing Mr Hoffman, ETSI quoted industry analysts as predicting "that m-commerce is poised for such an exponential growth over the next few years that could reach US$200 billion by 2004".

The first book to cover mobile commerce was Tomi Ahonen's M-profits in 2002.

The first university short course to discuss mobile commerce was held at the University of Oxford in 2003, with Tomi Ahonen and Steve Jones lecturing. As of 2008, UCL Computer Science and Peter J. Bentley demonstrated the potential for medical applications on mobile devices.^[2]

PDAs and cellular phones have become so popular that many businesses^[specify] are beginning to use mobile commerce as a more efficient way to communicate with their customers.

In order to exploit the potential mobile commerce market, mobile phone manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are working with carriers such as AT&T Wireless and Sprint to develop WAP-enabled smartphones. Smartphones 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.^[who?] 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.

Since the launch of the iPhone, mobile commerce has moved away from SMS systems and into actual applications. SMS has significant security vulnerabilities and congestion problems, even though it is widely available and accessible. In addition, improvements in the capabilities of modern mobile devices make it prudent to place more of the resource burden on the mobile device.

More recently, brick and mortar business owners, and big-box retailers in particular, have made an effort to take advantage of mobile commerce by utilizing a number of mobile capabilities such as location based services, barcode scanning, and push notifications to improve the customer experience of shopping in physical stores. By creating what is referred to as a 'bricks & clicks' environment, physical retailers can allow customers to access the common benefits of shopping online (such as product reviews, information, and coupons) while still shopping in the physical store. This is seen as a bridge between the gap created by e-commerce and in-store shopping, and is being utilized by physical retailers as a way to compete with the lower prices typically seen through online retailers.

Products and services available

Mobile ticketing

Template:Main: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 device with the help of simple application downloads, or by accessing the WAP portals of various travel agents or direct service providers.

Mobile vouchers, coupons and loyalty cards

Mobile ticketing technology can also be used for the distribution of vouchers, coupons, and loyalty cards. These items are represented by a virtual token that is sent to the mobile phone. A customer presenting a mobile phone with one of these tokens at the point of sale receives the same benefits as if they had the traditional token. Stores may send coupons to customers using location-based services to determine when the customer is nearby.

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, portable audio players, and video players into a single device is increasing the purchase and delivery of full-length music tracks and video. The download speeds available with 4G networks make it possible to buy a movie on a mobile device in a couple of seconds.

Location-based services

Main article: Location-based service

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

• Local discount offers
• Local weather
• Tracking and monitoring of people

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
• Stock quotes
• Sports scores
• Financial records
• Traffic reporting

Customized traffic information, based on a user's actual travel patterns, can be sent to a mobile device. This customized data is more useful than a generic traffic-report broadcast, but was impractical before the invention of modern mobile devices due to the bandwidth requirements.

Mobile banking

Main article: Mobile Banking

Banks and other financial institutions use mobile commerce to allow their customers to access account information and make transactions, such as purchasing stocks, remitting money. This service is often referred to as Mobile Banking, or M-Banking.

Mobile StoreFront

The reinvention of the mobile phone as a touch sensitive handheld computer has for the first time made mobile commerce practically feasible. 'According to ABI Research, mobile is going to get a lot bigger in the ecommerce market. The research firm is predicting that in 2015, $119bn worth of goods and services will be purchased via a mobile phone.'

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.

Auctions

Over the past three years^[when?] mobile reverse auction solutions have grown in popularity.^{[by whom?]} Unlike traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid. Many mobile SMS commerce solutions rely on a one-time purchase or one-time subscription; however, reverse auctions offer a high return for the mobile vendor as they require the consumer to make multiple transactions over a long period of time.

Mobile Browsing

Main article: Mobile browser

Using a mobile browser—a World Wide Web browser on a mobile device—customers can shop online without having to be at their personal computer.

Mobile Purchase

Catalog merchants can accept orders from customers electronically, via the customer's mobile device. In some cases, the merchant may even deliver the catalog electronically, rather than mailing a paper catalog to the customer. Some merchants provide mobile websites that are customized for the smaller screen and limited user interface of a mobile device.

Mobile marketing and advertising

Main article: Mobile marketing

In the context of mobile commerce, mobile marketing refers to marketing sent to mobile devices. Companies have reported that they see better response from mobile marketing campaigns than from traditional campaigns. Mobile campaigns must be based on the global Content Generationor what is called Generation C and four other 'C's: Creativity, Casual Collapse, Control, and Celebrity. A brief introduction... Creativity: let's face it, we're all creatives, if not artists! (Notice we didn't mean talented artists ;-). And as creativity normally leads to content, the link with GENERATION C is obvious. Which then brings us to Casual Collapse: the ongoing demise of many beliefs, rituals, formal requirements and laws modern societies have held dear, which continue to 'collapse' without causing the apocalyptic aftermath often predicted by conservative minds. From women's rights to gay marriage to not wearing a tie to work if you don't feel like it^{[3][unreliable source?]}

Research demonstrates that consumers of mobile and wireline markets represent two distinct groups who are driven by different values and behaviors, and who exhibit dissimilar psychographic and demographic profiles.^[4] As a result, successful mobile commerce requires the development of marketing campaigns targeted to this particular market segment.

Influence on youth markets

Mobile media is a rapidly changing field. New technologies, such as WiMax, act to accelerate innovation in mobile commerce. Early pioneers in mobile advertising include Vodafone, Orange, and SK Telecom.

Mobile devices are heavily used in South Korea to conduct mobile commerce. Mobile companies in South Korea believed that mobile technology would become synonymous with youth life style, based on their experience with previous generations of South Koreans. "Profitability for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Gibran Burchett.^{[citation needed]}

Memetic research

Main article: Memetic engineering

Leveious Rolando, John Sokol and Gibran Burchett are memetic researchers who pioneered mobile advertising with their early experimentation of DVB-H in 1999 with Sony BMG recording artist Wu-Tang Clan.

On a 2007 trip to South Korea, Rolando created a Venn-diagram model of rapidly evolving youth lifestyle trends. The diagram explained vital aspects of mobile adoption and sales of mobile global products and services. Rolando and his colleagues performed an experiment in which viral marketing, in the form of mobile commercials (or "mobisodes"), was used to attract and retain an audience. The two tested a theory of rapid memetic dissemination. They observed the youth cultural styles and trends, combined with the rate at which the test subjects passed on particular information to others. One group of subjects were given words and phrases to be used regularly in conversation. The control group was not given such a list This experiment measured the rate at which ideas and phrases were typically transmitted.

Rolando conducted other experiments in Europe, South Korea, and Japan involving viral mobile direct-marketing campaigns delivering products and coupons with instant savings to mobile devices. These studies were commissioned by top mobile providers like Deutsche Telekom (operator of T-Mobile) and Orange. The experiments used disc jockeys and mobile youth street teams to drive instant purchases of event-ticket sales, and the sales of three different viable youth products to over 200,000 end-users in eight days. This demonstrated how the global youth mobile market can react autonomously and create trends. It also showed how products take on new life because of the mindset of the young, who tend to be early adopters of any form of social technology services.

These researchers, along with others, developed methods deployed globally through concerts and events involving any form of youth culture in 2008, in partnership with leading mobile software and network providers. Leveious and others members of Trendwatching.com defined Content Generation a description of those born of the digital age of content and how their brains were re wired to think in real time content exchange. The Term is now globally The GENERATION C phenomenon captures the an avalanche of consumer generated 'content' that is building on the Web, adding tera-peta bytes of new text, images, audio and video on an ongoing basis. The two main drivers fuelling this trend? (1) The creative urges each consumer undeniably possesses. We're all artists, but until now we neither had the guts nor the means to go all out. (2) The manufacturers of content-creating tools, who relentlessly push us to unleash that creativity, using -- of course -- their ever cheaper, ever more powerful gadgets and gizmos. Instead of asking consumers to watch, to listen, to play, to passively consume, the race is on to get them to create, to produce, and to participate.

Payment methods

Main article: Mobile payment

Consumers can use many forms of payment in mobile commerce, including:

• Premium-rate telephone numbers', which apply charges to the consumer's long-distance bill
• Charges added to the consumer's mobile telephone bill, including deductions to pre-paid calling plans
• Credit cards
  • Some providers allow credit cards to be linked to a phone's SIM card
• Micropayment services
• Stored-value cards, often used with mobile-device application stores or music stores

See also

• electronic commerce
• Mobile Ticketing
• Mobile Banking
• Mobile commerce service provider
• Mobile dial code
• Mobile Payments

References

1. ^ Tiwari, R.; Buse, S. (2007). The Mobile Commerce Prospects: A strategic analysis of opportunities in the banking sector (PDF). Hamburg: Hamburg University Press. p. 33. ISBN 978-3-937816-31-9. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.94.46&rep=rep1&type=pdf. Retrieved August 23, 2010. 
2. ^ "iStethoscope in Medical Journal". http://apps.peterjbentley.com/Blog/?e=53483&d=08/29/2010&s=iStethoscope%20Pro%20in%20a%20medical%20journal. Retrieved November 23, 2010. 
3. ^ "Increasing Trend of Mobile Marketing". Youpark. Youpark ApS. http://youpark.com/blog/index.php?p=21. Retrieved August 23, 2010. 
4. ^ Schejter, A., Serenko, A., Turel, O., and Zahaf, M. (2010) "Policy implications of market segmentation as a determinant of fixed-mobile service substitution: What it means for carriers and policy makers", Telematics and Informatics, 27(1), 90-102.

• Tiwari, Rajnish; Buse, Stephan; Herstatt, Cornelius (Sept-Oct 2006). "From electronic to mobile commerce: opportunites through technology convergence for business services" (PDF). Asia Pacific Tech Monitor (New Delhi (India) 23 (5): 38–45. http://www.global-innovation.net/publications/PDF/APTM2006.pdf. Retrieved August 23, 2010. 
• [1]^{[dead link]}
• Troutman, Marci; Timpson, Steve (Fall 2008). "Effective Optimization of Web Sites for Mobile Access: the transition from eCommerce to mCommerce". Journal of Interactive Advertising 9 (1): 65–70. ISSN 1525-2019. http://jiad.org/article111. Retrieved August 23, 2010. 
• "Mobile Storefront". Mobile Commerce News. http://www.mobilestarterstore.com/index.php?option=com_content&view=category&layout=blog&id=1&Itemid=50. 50

External links

• Greene, Rory (2008). "Concessions one button away". Kentucky Kernel. http://www.thefango.com/hot-news.html. 
• Jordan, Jim (2008). "New arena service testing delivery to your seat". Herald Leader. http://www.thefango.com/hot-news.html.