Mobile Commerce Strategy


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Mobile Commerce Strategy

  1. 1. Mobile Commerce Strategy
  2. 2. Agenda Definition Technology 1G,2G,2.5G,3G,iB3G,4G, Pervasive Computing Applications Location sensitive, Time Critical, Controlled by information receiver or provider ,EC vs. MC Value Chain Business Model Q & A
  3. 3. Defining m-commerce ( Elliott, Phillips, 2004 ) <ul><li>Mobile commerce (M-commerce) is concerned with the use, application and integration of wireless telecommunication technology and wireless devices within the business systems domain. </li></ul><ul><ul><li>Location independent connectivity </li></ul></ul><ul><ul><li>Mobile Internet </li></ul></ul><ul><ul><li>Mobile E-commerce </li></ul></ul><ul><ul><li>Mobile phone, Mobile device (PDA, wireless vending machines, wireless LAN,…) </li></ul></ul><ul><li>Ramifications for wireless design:’E’  ‘M’ (Venkatesh, eds., 2003) </li></ul>
  4. 4. The M-commerce Systems Environment Wireless Vending Devices (M-Wallet capable) Voice, Picture, SMS, And Data ( Elliott, Phillips, 2004 )
  5. 5. A short history of wireless computing Sources form: Web Site [1] In 1897, Guglielmo Marconi first demonstrated the ability of wireless contact
  6. 6. 1G: Analog Communication ( Elliott, Phillips, 2004 ) <ul><li>Only in certain environments, particularly in government agencies and the military </li></ul><ul><li>1946 AT&T Bell introduced the first commercial mobile phone </li></ul><ul><li>1960s AT&T Bell developed the IMTS (Improved Mobile Telephone Services) </li></ul><ul><li>Late 1970s and early 1980s, microprocessor technology and improvements in cellular network infrastructure led to the birth of 1G, wireless telecommunications systems </li></ul><ul><li>1980s </li></ul><ul><ul><li>Nokia in Finland </li></ul></ul><ul><ul><li>Ericsson in Sweden </li></ul></ul><ul><ul><li>Motorola in USA </li></ul></ul><ul><ul><li>Sweden, Japan, and USA developed their own standard </li></ul></ul><ul><ul><li>Roaming was extremely difficult </li></ul></ul>
  7. 7. 1G: Analog Communication ( Elliott, Phillips, 2004 ) <ul><li>NMT system (Nordic Mobile Telephone ) </li></ul><ul><ul><li>Finland, Norway and Sweden </li></ul></ul><ul><li>AMPS (Advanced Mobile Phone Service) </li></ul><ul><ul><li>In various parts of Asia, the USA and Canada </li></ul></ul><ul><li>ETACS (Extended Total Access Communication Systems) </li></ul><ul><ul><li>United Kingdom </li></ul></ul><ul><li>JDC (Japan Digital Cellular) network system </li></ul><ul><ul><li>Japan </li></ul></ul>
  8. 8. 2G: Based on Digital Technology ( Elliott, Phillips, 2004 ) <ul><li>1G, lack of security and the proliferation of different wireless network standards </li></ul><ul><li>2G occurred in early 1990s </li></ul><ul><li>GSM (Global System for Mobile Communication ) </li></ul><ul><ul><li>More global compatible telecommunication network </li></ul></ul><ul><ul><li>European-Centric development </li></ul></ul><ul><ul><li>Less costly </li></ul></ul><ul><ul><li>Roaming was possible </li></ul></ul><ul><ul><li>Fully specify the complete network structure </li></ul></ul><ul><li>As well as voice communications, 2G mobile phone can send and receive message </li></ul><ul><ul><li>SMS (Short Messaging Services) </li></ul></ul><ul><ul><li>Mobile Internet Browsing, via the WAP (Wireless Applications Protocol) </li></ul></ul>
  9. 9. 2G Phone connection to the Mobile Internet Source: Kavassalis et al., 2003
  10. 10. 2.5G: Digital With Package Switched ( Elliott, Phillips, 2004 ) <ul><li>One significant drawback to 2G GSM network – primarily voice-centric with limited data transmission characteristics </li></ul><ul><li>GPRS (General Packet Radio Service) </li></ul><ul><ul><li>Developed in late 1990s and early 2000s </li></ul></ul><ul><ul><li>Higher transmission rates and always-on connectivity </li></ul></ul><ul><ul><li>E-mail can be received on a mobile phone handset without the need to dial-up </li></ul></ul><ul><ul><li>WAP content can be accessed at a quicker rate </li></ul></ul>
  11. 11. Source: Collis , 2003
  12. 12. 3G: Third generation wireless communication ( Elliott, Phillips, 2004 ) <ul><li>3G technology is aimed at providing a wide variety of services and capability in addition to voice communication, such as Multimedia data transfer, video streaming, video telephony, and full, unabridged Internet access </li></ul><ul><li>Providing Data Centric Services with enhanced voices and multimedia capabilities </li></ul><ul><li>UMTS (Universal Mobile Telephony Systems ) </li></ul><ul><ul><li>A new Network service replacement for the GSM </li></ul></ul><ul><li>3G is to provide an economically viable and technology-enhanced PCS portal </li></ul><ul><li>First introduced to Japan in 2001, and spread to Europe and USA in 2002 </li></ul><ul><li>Life Style Portal </li></ul><ul><li>Location dependent information </li></ul>
  13. 13. 3G: Third generation wireless communication source form: 3GPP TS 23.228, 24.228, 23.102
  14. 14. Sources form: Web Site [2]
  15. 15. Future Development <ul><li>iB3G </li></ul><ul><li>4G </li></ul><ul><li>Pervasive Computing </li></ul>
  16. 16. iB3G: Combining the best of both dual-mode handset Source form: 余孝先 , 2004 <ul><li>Cellular </li></ul><ul><ul><li>Coverage </li></ul></ul><ul><ul><li>Mobility </li></ul></ul><ul><ul><li>Billing System </li></ul></ul><ul><ul><li>Roaming </li></ul></ul><ul><ul><li>Widespread </li></ul></ul><ul><ul><li>2G/2.5G, PHS,3G, B3G </li></ul></ul><ul><li>WLAN </li></ul><ul><ul><li>Bandwidth </li></ul></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><li>Multimedia Services </li></ul></ul><ul><ul><li>Always Connected </li></ul></ul><ul><ul><li>Easy to Setup </li></ul></ul><ul><ul><li>802.11a,802.11b, 802.11g </li></ul></ul>
  17. 17. 4G: 4th Generation Wireless System source from: BWN Lab, web site [3] <ul><li>Reasons to Have 4G </li></ul><ul><ul><li>Support interactive multimedia </li></ul></ul><ul><ul><li>Wider bandwidth, higher bit rates </li></ul></ul><ul><ul><li>Global mobility and service portability </li></ul></ul><ul><ul><li>Low cost </li></ul></ul><ul><ul><li>Scalability of mobile networks </li></ul></ul><ul><li>What’s New in 4G </li></ul><ul><ul><li>Entirely packet-switched networks </li></ul></ul><ul><ul><li>All network elements are digital </li></ul></ul><ul><ul><li>Higher bandwidth and lower cost (up 100Mbps) </li></ul></ul><ul><ul><li>Tight network security </li></ul></ul>
  18. 18. Pervasive Computing source from: IBM Web Site [4,5] <ul><li>Pervasive Computing </li></ul><ul><ul><li>Enabling information access anywhere, anytime, on demand </li></ul></ul><ul><ul><li>Pervasive Computing delivers mobile access to business information without limits- from any device, over any network, using any style of interaction. It give people control over the time and the place, on demand. </li></ul></ul>
  19. 19. Pervasive Computing for a Nomadic Lifestyle Lessons Learned from MIT’s Project Oxygen, Zue 2004. <ul><li>Some System-Level Challenges </li></ul><ul><ul><li>Pervasive: Be available everywhere, at anytime, for anybody </li></ul></ul><ul><ul><li>Nomadic: Allow people and devices to move around freely </li></ul></ul><ul><ul><li>Embedded : Live in our world, sensing and affecting it </li></ul></ul><ul><ul><li>Human-centered : Understand and respond to human intent; solve real problems </li></ul></ul><ul><ul><li>Non-intrusive : Preserve privacy while ensure security </li></ul></ul><ul><ul><li>Adaptable : Provide flexibility in response to change </li></ul></ul><ul><ul><li>Eternal : Must never shut down or reboot </li></ul></ul><ul><ul><li>Organic: Allow applications and services to be added easily </li></ul></ul><ul><ul><li>… </li></ul></ul>
  20. 20. Integrated multimedia nature of 3G domain- the PCS (Personal Communications Service) ( Elliott, Phillips, 2004 )
  21. 21. M- Commerce Applications <ul><li>Delineating the effects of M-commerce: A space- time matrix </li></ul><ul><li>M-Commerce applications are categorized along three dimensions: </li></ul><ul><ul><li>Location sensitive </li></ul></ul><ul><ul><li>Time critical </li></ul></ul><ul><ul><li>Controlled by information receiver or provider </li></ul></ul><ul><li>EC vs. MC </li></ul>
  22. 22. Delineating the effects of M-commerce: A space- time matrix Balasubramanian et al. 2002
  23. 23. Delineating the effects of M-commerce: A space- time matrix Balasubramanian et al. 2002
  24. 24. Taxonomy of M- Commerce Applications Balasubramanian et al. 2002 <ul><li>The extent to which the applications is location sensitive </li></ul><ul><li>The extent to which the applications is time critical </li></ul><ul><li>The extent to which the applications is controlled by the information receivers or by the providers </li></ul>Dimension 1: Location Sensitive Dimension 2: Time Critical Dimension 3: Controlled by the Information Receivers or by the Providers
  25. 25. Mobile information assets: location sensitive Rao, Minakakis, 2003 ;Balasubramanian et al. 2002 <ul><li>Deploy Mobile Internet services based on the various benefits of mobility </li></ul><ul><ul><li>Information that is provided on a geographical locations </li></ul></ul><ul><ul><li>Information that tracks an individual user (via their mobile phone) to determine their specific geographical location anywhere in the world </li></ul></ul><ul><ul><ul><li>GPS (Geographical Positioning Systems) </li></ul></ul></ul><ul><ul><ul><li>Support location-based services (LBS) </li></ul></ul></ul><ul><ul><li>Location-tracking services are encouraged by both business and national government </li></ul></ul><ul><ul><ul><li>e911 in USA: 999 in UK; 119 in Taiwan </li></ul></ul></ul>
  26. 26. Locations Assets ( Elliott, Phillips, 2004 ) Location-based services information Location-based product Retailing Location-based Products Location-based Access Location-based Maps (directions)
  27. 27. Time Critical Balasubramanian et al. 2002 <ul><li>Applications vary along the dimension in terms of the degree to which they are time critical </li></ul><ul><ul><li>Participation in a virtual auction (+) </li></ul></ul><ul><ul><li>Mobile access to digital libraries (–) </li></ul></ul><ul><li>It will involve the exchange of information related to a scheduled </li></ul><ul><ul><li>Flight departure </li></ul></ul><ul><li>Information that quickly depreciates in value </li></ul><ul><ul><li>A stock price </li></ul></ul><ul><li>Information that is required to address some emergence </li></ul><ul><ul><li>A roadside assistance </li></ul></ul>
  28. 28. Controlled by the information receivers or by the providers Balasubramanian et al. 2002 <ul><li>Applications controlled by an information receiver </li></ul><ul><ul><li>Relates to more random, unforeseen needs </li></ul></ul><ul><ul><li>A call for service after an automobile breakdown </li></ul></ul><ul><li>Applications controlled by an information provider </li></ul><ul><ul><li>Tend to be marketing “broadcast” activities </li></ul></ul><ul><ul><ul><li>Coupon announcement </li></ul></ul></ul><ul><ul><li>Maintain on an ongoing basis by service providers or coordinators </li></ul></ul><ul><ul><ul><li>Monitoring of truck fleets using on board sensors </li></ul></ul></ul>
  29. 29. M-commerce vs. E-commerce ( Elliott, Phillips, 2004 ) <ul><li>E-Commerce is concerned with data and information transfer, and with Internet access, via wired technology </li></ul><ul><li>M-Commerce is concerned with data and information transmission, and Internet access, via wireless technologies and various portable devices </li></ul>
  30. 30. Comparison between E-commerce and M-commerce ( Elliott, Phillips, 2004 ) Mobility and Portability of access Fixed non-time-constrained access Product or service attraction Dynamic location-based data Static information and data Product or service assets Wireless Global access Wired Global access Product or service provision Service focus Product focus Product or service focus M-Commerce E-Commerce Factor
  31. 31. Comparison between E-commerce and M-commerce Barnes And Huff, 2003; Elliott, Phillips, 2004 3.6%; 24% PC Less than 0.5% Click through rates for banner AD and e-Mail ( i-mode ) Mobile phone : High PC: Medium Personal Devices Yes, in which services are charged directly to the user’s phone bill No Reverse Billing Small Medium Display Screen Size and Memory Network Operator know who you are, where you are, can direct you to the portal of choice, and can charge you money Hard to find User’s Location Users seem prepared to pay a ‘mobility premium’ No standard way to charge; PC is essentially free Usage and Applications will charge Yes, like a gatekeeper No Network Operators can determine the services M-Commerce E-Commerce Factor
  32. 32. M-Commerce Value Chain Emerging Industry Structure (Bane, Bradley, and Collis (1998)) Shopping Entertainment Shop at home Transactions Pornography Education Publications Gambling Facilitating Technologies Hardware Fileservers CPU Software Computing Algorithms Digital Signal Processing General Magic ATM Digital Wormhole Terminal Transmission Manipulation Packaging Content Phone Voice Television Video Computer Data = Industry size (relative)
  33. 33. M-Commerce Value Chain European Commission 1996 (Barnes, Stuart J. 2002)
  34. 34. European Mobile Portal and Media Value Chain Source:
  35. 35. i-mode and Media Value Chain Source:
  36. 36. MacDonald, 2003
  37. 37. M- Commerce Business Models MacDonald, 2003 <ul><li>Brand Building or Media Mix </li></ul><ul><li>Customer Relationship Management </li></ul><ul><li>Online Retail </li></ul><ul><li>Premium Content </li></ul><ul><li>Aggregation </li></ul><ul><li>B2B </li></ul><ul><li>Advertising </li></ul>
  38. 38. MacDonald, 2003 9%
  39. 39. i- mode’s services Sources form: Web Site [6]
  40. 40. i- mode’s services Sources form: Web Site [6]
  41. 41. Sources form: Web Site [2]
  42. 42. Sources form: Web Site [2]
  43. 43. Sources form: Web Site [2]
  44. 44. Obstacles to M-commerce (I) ( Elliott, Phillips, 2004 ) <ul><li>Efficient and fast wireless telecommunications services are often focused within specific area </li></ul><ul><ul><ul><li>West Europe,the USA, Japan </li></ul></ul></ul><ul><ul><ul><li>Not available in low population area </li></ul></ul></ul><ul><ul><ul><li>Many developing countries has led these countries to adopt wireless telecommunications </li></ul></ul></ul><ul><li>Wireless Mobile Internet access more costly than wired Internet access </li></ul><ul><ul><ul><li>3G technologies and devices often deliver data content that are indistinguishable form those available on the wired Internet </li></ul></ul></ul><ul><ul><ul><li>Mobile Internet users are accustomed to paying for Internet and correspondingly expect to pay for certain levels service and reliability </li></ul></ul></ul>
  45. 45. Obstacles to M-commerce (II) ( Elliott, Phillips, 2004 ) <ul><li>Concerns over privacy and security still pervade the wireless data transmission world </li></ul><ul><ul><ul><li>3G technology is inherently more secure than 2G </li></ul></ul></ul><ul><ul><ul><li>Many government and business organizations banned the use of 2G mobile phone for private or secure conversations </li></ul></ul></ul><ul><li>Many individuals and organizations still harbor concerns over the health issues of wireless technology </li></ul><ul><ul><ul><li>With regard to microwave radiation emission levels </li></ul></ul></ul><ul><ul><ul><li>Up to the year 2000 the studies remain inconclusive </li></ul></ul></ul><ul><ul><ul><li>Many government are requiring mobile phone devices manufacturer to publish health evidence </li></ul></ul></ul>
  46. 46. The development of M-commerce <ul><li>In Europe and Japan </li></ul><ul><ul><li>Focus on delivering to the customer technology, such as internet –enable mobile phones, and the provision of Mobile Internet services </li></ul></ul><ul><ul><li>Europe view: Lifestyle consideration </li></ul></ul><ul><li>In USA </li></ul><ul><ul><li>Focus on the use of palm computers, other mobile devices (e.g. the BlackBerry mobile E-mail devices), and other wireless technology to improve the effectiveness of business systems process </li></ul></ul><ul><ul><li>USA view: Support mobile working </li></ul></ul>
  47. 47. The growth of spread of M-commerce ( Elliott, Phillips, 2004 ) <ul><li>Innovations: </li></ul><ul><ul><li>Developments in mobile wireless application and technologies </li></ul></ul><ul><li>Adoption: </li></ul><ul><ul><li>Proliferation and use wireless technologies by (potential) customers </li></ul></ul><ul><li>Increased competition: </li></ul><ul><ul><li>Desired by organizations to expand markets and added value to products and services </li></ul></ul>
  48. 48. Kodama, 2003
  49. 49. Q & A <ul><li>Global Competition </li></ul><ul><li>Convergence </li></ul><ul><li>Location Base </li></ul><ul><li>Time Critical </li></ul><ul><li>Personalize </li></ul><ul><li>Killer Application </li></ul>
  50. 50. Reference : <ul><li>余孝先, ” 雙網整合之技術、服務、與應用研發策略 ” ,行 政院 2004 年產業科技策略會議 。 </li></ul><ul><li>Elliott, G.; Phillips, N., Mobile Commerce and Wireless Computing Systems, Pearson Educations Limited, England. 2004. </li></ul><ul><li>Kavassalis, P., Spyropoulou, N., Drossos, D., Mitrokostas, E., Gikas, G., & Hatzistamatiou, A. (2003). Mobile permission marketing: Framing the market inquiry. International Journal of Electronic Commerce, 8 (1), 55-79 </li></ul><ul><li>Collis, D., Carrier Grade Voice over IP , McGraw-Hill, Second Edition, 2003. </li></ul><ul><li>Zue, V., “Pervasive Computing for a Nomadic Lifestyle,” 行 政院 2004 年產業科技策略會議 2004. </li></ul><ul><li>Balasubramanian, S., Peterson, R.A. and Jarvenpaa, S. L., “Exploring the Implications of M-Commerce for Markets and Marketing,” Journal of the Academy of Marketing Scienc e, Vol. 30, No. 4, Fall 2002, pp.348-361. </li></ul><ul><li>Rao, B. and Minakakis, L., “Evolution of Mobile Location-based Services,” Communications of The ACM, December 2003, Vol. 46, No. 12, pp.61-65. -84. </li></ul><ul><li>Barnes, Stuart J. And Huff, Sid L., “Rising Sun: iMode and the Wireless Internet”, Communications of The ACM , Nov.2003, Vol. 46, No. 11, pp. 79-84. </li></ul><ul><li>Bane, P. W., Bradley, S.P. and Collis, D. J. “The Converging Worlds of Telecommunication, Computing, and Entertainment,” in Bradley, S. P. and Noland, R. L. eds., Sense and Response: Capturing Value in the Internet Era, Harvard Business School Press, Boston, MA., 1998. </li></ul><ul><li>Barnes, Stuart J. “The Mobile Commerce Value Chain: Analysis and Future developments”, International Journal of Information Management, 22, 2002, pp.91-108. </li></ul>
  51. 51. Reference : <ul><li>MacDonald, D. J. “NTT DoCoMo’s i-mode: Developing win-win relationships for mobile commerce” In B. E. Mennecke and T. Strader, Eds., Mobile Commerce: Technology, Theory and Applications , Idea Group Publishing, Hershey, 2003, 1-25. </li></ul><ul><li>Kodama, M. “Strategic community-based theory of firms: case study of NTT DoCoMo”, Journal of High Technology Management Research , 14, (2003), pp. 307-330. </li></ul><ul><li>Reference Web Sites: </li></ul><ul><li>[1] bio.html </li></ul><ul><li>[2] </li></ul><ul><li>[3] Mobility Management in 4G Wireless Systems. </li></ul><ul><li>[4] </li></ul><ul><li>[5] </li></ul><ul><li>[6] </li></ul>