ch 08 mobile commerce

Chapter 8

Mobile Commerce

EC 2006 Prentice Hall 2

Mobile Commerce: Overview

• Mobile commerce (m-commerce,

m-business)—any e-commerce done in a wireless environment, especially via the Internet– Can be done via the Internet, private

communication lines, smart cards, etc.– Creates opportunity to deliver new services to

existing customers and to attract new ones


Exhibit 8.2Classes of M-Commerce Applications


M-Commerce Terminology

• Generations– 1G: 1979-1992 wireless technology– 2G: current wireless technology; mainly

accommodates text– 2.5G: interim technology accommodates

graphics– 3G: 3rd generation technology (2001-2005)

supports rich media (video clips)– 4G: will provide faster multimedia display (2006-

2010)


Terminology and Standards

• GPS: Satellite-based Global Positioning System

• PDA: Personal Digital Assistant—handheld wireless computer

• SMS: Short Message Service

• EMS: Enhanced Messaging Service

• MMS: Multimedia Messaging Service

• WAP: Wireless Application Protocol

• Smartphones—Internet-enabled cell phones with attached applications


Specific Attributes of M-Commerce

• Attributes of m-commerce and its economic advantages– Mobility—users carry cell phones or other mobile

devices– Broad reach—people can be reached at any time


Attributes of M-Commerce (cont.)

• Value-added attributes of m-commerce– Ubiquity—easier information access in real-time– Convenience—devices that store data and have

Internet, intranet, extranet connections

– Instant connectivity—easy and quick connection to Internet, intranets, other mobile devices, databases

– Personalization—preparation of information for individual consumers

– Localization of products and services—knowing where the user is located at any given time and match service to them


Exhibit 8.3Characteristics of M-Commerce


The Drivers

• Widespread availability of devices

• No need for a PC• Handset culture• Vendors’ push

• Declining prices• Improvement of bandwidth• Explosion of EC in general


Mobile Computing Infrastructure

• Cellular (mobile) phones

• Attachable keyboard• PDAs• Interactive pagers• Other devices

– Notebooks– Handhelds– Smartpads

• Screenphones—a telephone equipped with color screen, keyboard, e-mail, and Internet capabilities

• E-mail handhelds• Wirelined—connected by

wires to a network

Hardware


Mobile Computing Infrastructure (cont.)

• Software– Microbrowser– Mobile client operating system (OS)– Bluetooth—a chip technology and WPAN standard that

enables voice and data communications between wireless devices over short-range radio frequency (RF)

– Mobile application user interface– Back-end legacy application software– Application middleware– Wireless middleware


Mobile Computing Infrastructure (cont.)

• Networks and access– Wireless transmission media

• Microwave• Satellites• Radio• Infrared• Cellular radio technology

– Wireless systems


Wireless Standards and Security

• M-commerce supported by– Standards– Security– Voice systems


Security Issues

• Viruses

• Smart card security solutions– Voice communication can be intercepted by

hackers– One solution is an embedded biometric add-on

• Back-end security solutions—public key infrastructure (PKI) and M-CERT (mobile certification)


Voice Portals

• Voice portal—a Web site with audio interface, accessed by making a phone call– Request information verbally from system that:

• Retrieves the information

• Translates it into a computer-generated voice reply

• Tells you what you want to know

– Iping.com—reminder and notification service– Helps businesses find new customers


Mobile Financial Applications

• Wireless electronic payment systems– Mobile phones become secure, self-contained

purchasing tools capable of instantly authorizing payments over the cellular network for goods and services consumed

• Micropayments—electronic payments for small-purchase amounts (generally less than $10)


Mobile Financial Applications (cont.)

• M-wallet (mobile wallet)—a wireless wallet that enables cardholders to make purchases with a single click from their wireless devices

• Bill payments directly from cell phone via:– Bank– Credit card– Prepaid arrangement


Examples of Financial Applications

• Swedish Postal Bank• Dagens Industri• Citibank• Japanese banks

• Hoover’s wireless (hoover.com)

• ASB Bank (New Zealand)

• Boston’s Faneuil Hall Marketplace


Exhibit 8.6Bill Payments by Cell Phone


Shopping from Wireless Devices

• Buy.com allows shopping from wireless devices

• In 5-10 years most businesses will be wireless

• Online stores will become showrooms– View products– Purchase them using handheld devices– Possibly enhanced by bar code scanners – Customization may be possible


Supporting Mobile Employees

• Smartphones and hand-held devices

• Wearable wireless devices—mobile wireless computing devices for employees who work on buildings and other difficult-to-climb places– Cameras Screen– Keyboard Touch-panel display


Supporting Mobile Employees (cont.)

• Job dispatch– Transportation (delivery of food, oil, newspapers,

cargo, courier services, tow trucks)– Taxis (already in use in Korea and Singapore)– Utilities (gas, electricity, phone, water)– Field service (computer, office equipment, home

repair)– Health care (visiting nurses, doctors, social services)– Security (patrols, alarm installation)


Non-Internet Intrabusiness Applications

• Wireless networking used for item picking in warehouses

• Delivery and order status updates

• Online dispatching– Online diagnosis support from remote locations– Parts ordering/inventory queries


Non-Internet Intrabusiness Applications (cont.)

• Mobile shop-floor quality control systems enable – Voice reports by inspectors– Data collection from facilities– Transmission to a central processor

• Salespeople connect to corporate networks

• Remote database queries


Mobile Consumer and Personal Service Applications

• Mobile gaming devices– PDAs (Handspring’s Visor) with Flash RAM card– Nintendo’s Game Boy Advance– Sony’s PocketStation– Sega’s portable device connected to Dreamcast

• Mobile gambling– Germany’s online lottery company fluxx.com available via

mobile terminals– Hong Kong, betting on horse races via cell phones is popular


Mobile Consumer and Personal Service Applications (cont.)

• Mobile entertainment– Music– Video—real-time streaming video (packetvideo.com)

• Hotels—hotel guests equipped with Bluetooth-enabled mobile devices are instantly recognized

• Intelligent homes and appliances


Exhibit 8.13Intelligent Home Connected by Wireless LAN



• Wireless telemedicine—use of mobile telecommunications infrastructures and multimedia technologies to provide medical information and deliver health care services remotely

• Other services for consumers– Providing news, weather, and sports reports– Online language translations– Information bout tourist attractions (hours, prices)– Emergency services



• Non-Internet consumer applications– Smart cards used in transportation

“Contactless” cards (proximity cards) used to pay bus and subway fares and road tolls

– Amplified remote-sensing cards have an RF (radio frequency) of up to 30 meters used for toll collection


Location-Based Commerce

• Location-based commerce (L-commerce)—e-commerce applications provided to customers based on a user’s specific location

• Location-based technologies– Global positioning systems—a wireless system that

uses satellites to enable users to determine their position anywhere on the earth

– Geographical information systems (GIS)—relates longitude and latitude of GPS into place or address (mapinfo.com)

– GPS on handsets—stand-alone units for tracking applications


Exhibit 8.14Location-Based Services Involving Maps


Barriers to L-Commerce

• The accuracy of some of the location technologies

• The cost-benefit justification

• M-spam

• The bandwidth of GSM networks


Limitations of M-Commerce

• Usability problem– Usability of a site is critical to attract attention and

retain user stickiness– Effectiveness, efficiency, satisfaction– Some mobile devices are found to be ineffective– Customers want to find exactly what they are

looking for, easily and quickly, not possible in the 2G text-based environment

– More and faster multimedia will be available as 3G spreads


Technical Limitations

• Lack of standardized security protocol– Security methodology

needs to be incorporated in mobile

– Customer confidence is low

• Insufficient bandwidth– Limits the extent to

which mobility can be viewed commodity

• 3G licenses– Auctioned by

governments– Certain countries cannot

be served by these devices

• Transmission & power consumption limitations– Multipath interference– Weather and terrain

problems– Distance-limited

connections


Technical Limitations (cont.)

• WAP limitations– Speed—in 2002 connections to WAP sites are still too

slow– Cost—fees for mobile phone users are still too high– Accessibility—as of spring 2002, fewer than 50,000

WAP-accessible sites worldwide (must be written in WML)


Technical Limitations (cont.)

• Potential health hazards– Fear of radiation– Unsafe to drive and use wireless phone– Cell phones may interfere with sensitive medical

devices (pacemakers)– Lawsuits relating to the potential health hazards of

wireless devices have already been filed—public is advised to adopt a precautionary approach in using mobile phones (earphone device)


Implementing M-Commerce

– Basic (fixed) fees

– Point-of-traffic fees

– Transaction fees

– Content and service charges

– Payment clearing

– Hosting fees

– Certification (PKI) fees

Revenue models


Implementing M-Commerce (cont.)

• Consumer confidence and trust– Customers love free or inexpensive services like

those offered by iMode– Customers not willing to pay large amounts of

money for services unless they trust the product/vendor

– Confidence should increase with reliable payment mechanisms

– Research is being conducted in this area

ch 08 mobile commerce

Technology

overview mobile commerce

wireless environment

wireless standardscont

mobile network

wireless support application

voice data

current wireless technology

commerce attributes