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Mobile Commerce

Mobile Commerce. Prof. Euiho Suh 2004. 10. 18. POSMIS. Contents. Definition and differences of M-commerce Classes of M-commerce applications Value Chain Terminology and Standards Attribute of M-commerce The driver of M-commerce Mobile Computing Infrastructure

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Mobile Commerce

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  1. Mobile Commerce Prof. Euiho Suh 2004. 10. 18 POSMIS

  2. Contents • Definition and differences of M-commerce • Classes of M-commerce applications • Value Chain • Terminology and Standards • Attribute of M-commerce • The driver of M-commerce • Mobile Computing Infrastructure • Wireless Standards and Security • Applications : finance, shopping • Location-based Commerce • Limitations of M-commerce • Technical Limitation

  3. Definition of Mobile Commerce • Any transaction conducted over a mobile telecommunications network. • It represents a subset of all e-commerce transactions both in business-to-consumer and the business-to-business area

  4. Differences between M- and E-commerce • A permanent factor that makes difference between M- and the rest of the E- commerce is the possibility of the user to engage anywhere and anytime in M-commerce transactions; for some this is the crucial difference • The main functional distinction between the E-commerce in general and M-commerce are dynamic Location Based Services (LBS) that use the actual location of the terminal on earth in one way or the other to perform the transaction (cf. ordering taxi in a foreign city based on the positioning of the terminal and the taxi)

  5. Differences between M- and E-commerce (Cont.) • Further difference are the properties of the truly portable terminals: the simple UI facilities, slower processor, and smaller memory resources, as well as tiny energy reserves, as compared to PC:s or laptops • A fourth main difference is the relatively small wireless link transmission capacity offered to the terminals; although the capacity is increasing with every network generation (10 kbps, 100 kbps, 1 Mbps..), so is the capacity of the fixed networks; thus the gap will exist also in the future

  6. Classes of M-Commerce Applications

  7. Classes of M-Commerce Applications (Cont.) M – Commerce Applications WASP Games Job Dispatch Music CRM Advertising Video Supply chain Integration Auctions Telemetry Telematics Healthcare Shopping Information Provisioning Broking M-payment Reservations Ticketing E-salary E-bill Banking Information Management Security SMS SMS Toolkit WAP GPRS EDGE UMTS 1998 2000 2001 2002 2003 2004 1999 SMS IM Chat E - mail PIM UIM Customer care M – Commerce Enabling Applications Source: Durlacher, Veba

  8. Mobile Commerce Value Chain Source : The mobile commerce value chain: analysis and future developments, Stuart J. Barnes, International Journal of Information Management 22 (2002) 91–108

  9. 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)

  10. 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

  11. 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

  12. 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

  13. Characteristics of M-Commerce

  14. Widespread availability of devices No need for a PC Handset culture Vendors’ push Declining prices Improvement of bandwidth Explosion of EC in general The Drivers

  15. 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 Mobile Computing Infrastructure • Hardware

  16. Mobile Computing Infrastructure (cont.) • Unseen infrastructure requirements • Suitably configured wireline or wireless WAN modem • Web server with wireless support • Application or database server • Large enterprise application server • GPS locator used to determine the location of mobile computing device carrier

  17. Mobile Computing Infrastructure (cont.) • 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 • Software

  18. Mobile Computing Infrastructure (cont.) • Networks and access • Wireless transmission media • Microwave • Satellites • Radio • Infrared • Cellular radio technology • Wireless systems

  19. Wireless Standards and Security • M-commerce supported by • Standards • Security • Voice systems

  20. Wireless Standards • Wireless standards • Time-division Multiple Access (TMDA) • General Packet Radio Services (GPRS) • Code Division Multiple Access (CDMA) • CDMA One • Global System of Mobile Communication (GSM) • WLAN 802.11b (Wi-Fi) • Wideband CDMA

  21. Wireless Standards (cont.) • Wireless Application Protocol (WAP)—a set of communications protocols designed to enable different kinds of wireless devices to talk to a server installed on a mobile network, so users can access the Internet • Subscriber Identification Module (SIM) • Wireless Markup Language (WML) • Voice XML (VXML) • Enhanced Data Rates for Global Evaluation (EDGE) • Universal Mobile Telecommunications System (UMTS) • IPv6

  22. 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)

  23. Voice Systems for M-Commerce • Hands-free and eyes-free operations increase productivity, safety, effectiveness • Disabled people can use voice data for various tasks • Voice terminals are portable • 2 ½ times faster than typing • Fewer errors

  24. Applications : mobile financial • 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)

  25. Applications : mobile financial (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

  26. Swedish Postal Bank Dagens Industri Citibank Japanese banks Hoover’s wireless (hoover.com) ASB Bank (New Zealand) Boston’s Faneuil Hall Marketplace Applications : mobile financial (cont.)

  27. Bill Payments by Cell Phone

  28. Applications : 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

  29. Applications : Shopping from Wireless Devices (Cont.)

  30. 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

  31. Location-Based Services Involving Maps

  32. GPS System

  33. Applications : Telematics and Telemetry • Telematics—integration of computers and wireless communications to improve information flow using the principles of telemetry • GM OnStar system—cellular phone and PDA are integrated to provide personal information management, mobile Internet services, entertainment on the vehicle vehicle dashboard • Sophisticated text-to-speech and voice recognition capabilities minimize driver distraction

  34. Applications : Telematics and Telemetry (Cont.) • Use as a remote vehicle self-diagnostics tool • Daimler-Chrysler and Volvo experimented with installation of GSM chip sets in cars • Monitor performance and to provide an early warning system for potential problems • Chip sends a message to the manufacturer indicating what the problem is • Manufacturer’s system analyzes various data and provides a fix (via a software tool) • Developing faults found before they become critical and continuous operation of the car can be ensured

  35. Barriers to Location-Based Commerce • The accuracy of some of the location technologies • The cost-benefit justification • M-spam • The bandwidth of GSM networks

  36. 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

  37. 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

  38. 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)

  39. 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)

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