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The M-Business Evolution

  • By Prentice Hall
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M-Commerce Services

The next logical step after wireless data services such as wireless Internet access is for the wireless carriers to facilitate M-Commerce transactions over their networks. Many pilots and trials have been adopted worldwide, with some carriers such as NTT DoCoMo already having production implementations. We have seen this earlier in the section on global trends. Examples of some of the trials that have occurred include the NetCom trial with the M-Commerce software company MoreMagic, the AT&T Wireless trial with QPass, and the DirectBill service offered by Cingular Wireless.

The trial conducted by Norwegian mobile operator NetCom used the MoreMagic payment transaction software to pilot four M-Commerce service offerings: a popular Norwegian daily soap, a pizza delivery service, an online newspaper archive, and a location-based service. The MoreMagic transaction platform is described in Chapter 8.

Outside of the wireless carriers, other players are also engaging in pilots. Palm has been testing M-Commerce payments using the Palm PDA as the holder of digital wallet information; such information can be beamed over the IR port to merchants with Palm-compatible terminals for payment.

Since M-Commerce is still in its infancy, business models have not yet stabilized. It remains to be seen who the eventual winners will be. The main players are the wireless carriers, the portals and content aggregators, the financial service institutions, and the merchants themselves. How the value extracted from M-Commerce transactions will be shared between these players is still to be determined. What is likely is that a significant portion of the percentage of the revenues will shift from the wireless carriers toward the content and application service providers.

Who will own the M-Commerce consumer is also an open question. The carriers, as we suggested earlier, may be one possibility. They control and operate the network and the portal interface presented to the user. But the financial services institutions, who can be carrier network agnostic, may also be able to extend their customer relationship from the credit card world to the M-Commerce world, that is with digital wallets. The digital wallet is an important item to own from a provider standpoint, because it can contain customer payment choices and shipping addresses, as well as customer preferences and a link to the customer's transaction history and buying habits.

One aspect of M-Commerce transactions that the wireless carriers have seemed reluctant to own is the billing for third-party products and services. The issues around billing relate to the legality of billing for non-telecom-related changes, the issue of collecting payment, and the issue of customer care and dispute resolution.

The winning strategy for the wireless carriers may well be to outsource the billing and collection aspects around M-Commerce transactions, but to own the customer profile, preferences, and the digital wallet. This builds in switching costs for the consumer, owing to the time required to activate a digital wallet, and the level of personalization and ease-of-use that it provides. Yet this still frees the wireless carrier from the burden of handling or providing all the costs associated with post-transaction customer care and billing.

On the other hand, merchants may become less willing to share revenues if all the carrier provides is the channel to the customer. As closed wireless carrier portals give way to open portals with free access to any Internet URL, the carriers may find themselves dis-intermediated from M-Commerce transactions with merchants who already have a strong brand name and customer loyalty. To stay in the loop, they need to provide more user-friendly, efficient, and secure M-Commerce mechanisms than the merchants provide by themselves. This may include digital wallet services, one-click transactions, ease of navigation, security, and context-relevant services that enhance the value proposition for both the merchant and the consumer. This model of value-added services in order to stay a key component of the value chain is similar to the strategies of distributors in the supply chain of the business-to-business electronic commerce world.

The action item for the enterprise contemplating their M-Commerce strategy is to continue to observe the various business models and revenue sharing arrangements that are occurring worldwide. Moreover, enterprises need to be prepared for when this channel becomes significant. Eventually the M-Business channel will be just as important as the wired Internet channel to customers that you have today. Today, there are few consumers making M-Commerce transactions, so the incentives for the enterprise to invest in and roll out M-Commerce solutions are reduced. However, it is prudent for the enterprise to plan an overall M-Business strategy that considers customers, employees, suppliers, and business partners. The evolution and adoption of M-Commerce within those user constituencies must be a consideration in an enterprise's future endeavors. Be prepared to migrate from wireless communications and content to wireless commerce as your customers begin their adoption. Providing simple non-transactional M-Business services to customers today can also help to pave the way to transactional M-Commerce interactions with your customers in the future.

Wireless Data Example
AT&T Wireless
As an example of a wireless Internet offering provided by a major carrier, we'll take a look at the Digital PocketNet Service offered by AT&T Wireless. In addition to access to WAP-enabled Web sites, this service provides e-mail, address book, calendar, alerts, and to-do functionality for the cellular phone. The e-mail account has the format username@mobile.att.net and users can customize the settings of their wireless data services either directly on the cellular phone or via the AT&T Web site at http://www.att.com/mypocketnet. Updates to the preferences made on either the cell phone directly or via the Web site are reflected immediately in the service. For example, the Web site can be used to enter favorite links to Web sites or favorite phone numbers. The personal Web site provided by AT&T Digital PocketNet Service is powered by InfoSpace. Additionally, FoneSync software from Openwave is used to provide synchronization capabilities between the PocketNet Service and a user's Personal Information Management (PIM) software, i.e., Microsoft Outlook, Lotus Notes, Lotus Organizer, Symantec ACT!, and Goldmine.
Figure 2-6 shows some of the menu options and partner content available from the "Web Sites" section of the PocketNet service.
Figure 2-6  Sample of Content Providers on the AT&T Digital PocketNet Service.

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This article was originally published on August 14, 2002

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