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Chapter 8 Mobile Commerce

Chapter 8 Mobile Commerce

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Chapter 8 Mobile Commerce

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  1. Chapter 8Mobile Commerce Prentice Hall, 2003

  2. Learning Objectives • Describe the characteristics and attributes of m-commerce • Describe the drivers of m-commerce • Understand the supportive technologies and their capabilities • Describe the wireless standards and transmission networks Prentice Hall, 2003

  3. Learning Objectives (cont.) • Describe applications of m-commerce to finance, marketing, and customer service • Describe the applications of m-commerce within organizations • Describe B2B and supply chain applications of m-commerce • Describe consumer and personal applications of m-commerce Prentice Hall, 2003

  4. Learning Objectives (cont.) • Describe some non-Internet m-commerce applications • Describe location-based commerce (l-commerce) • Describe the major limitations • Describe some implementation issues of m-commerce Prentice Hall, 2003

  5. NextBus: A Superb Customer Service • The Problem • Buses in San Francisco have difficulty keeping to 20 minute schedule during rush hours • Posted schedule becomes meaningless • The Solution • Bus riders carrying Internet-enabled cell phone or PDA helps: • Find estimated arrival time at each stop, digitally in real time • Soon location-based advertisements will pop up—you have time to get a cup of coffee before the bus arrives—Starbuck’s is 200 feet to the right Prentice Hall, 2003

  6. NextBus (cont.) • The Results • Passengers in San Francisco are happy with the system • Worries about missing the bus are diminished • May discover they have time for a cup of coffee before the bus arrives • Bus company can: • Schedule better • Arrange for extra buses when needed • Improve operations Prentice Hall, 2003

  7. Exhibit 8.1NextBus Operational Model Prentice Hall, 2003

  8. Mobile Commerce: Overview • Mobile commerce (m-commerce, m-business)—anye-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 Prentice Hall, 2003

  9. Exhibit 8.2Classes of M-Commerce Applications Prentice Hall, 2003

  10. 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) Prentice Hall, 2003

  11. 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 Prentice Hall, 2003

  12. 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 Prentice Hall, 2003

  13. 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 Prentice Hall, 2003

  14. Exhibit 8.3Characteristics of M-Commerce Prentice Hall, 2003

  15. 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 Prentice Hall, 2003

  16. 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 Prentice Hall, 2003

  17. 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 Prentice Hall, 2003

  18. 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 Prentice Hall, 2003

  19. Mobile Computing Infrastructure (cont.) • Networks and access • Wireless transmission media • Microwave • Satellites • Radio • Infrared • Cellular radio technology • Wireless systems Prentice Hall, 2003

  20. Exhibit 8.5 Delta Airlines Wireless System Prentice Hall, 2003

  21. Wireless Standards and Security • M-commerce supported by • Standards • Security • Voice systems M-commerce Prentice Hall, 2003

  22. 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 802.11 (Wi-Fi) • Wideband CDMA Prentice Hall, 2003

  23. 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 Prentice Hall, 2003

  24. 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) Prentice Hall, 2003

  25. 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 Prentice Hall, 2003

  26. Interactive Voice Response • Interactive voice response (IVR)—acomputer voice system that enables users to request and receive information and to enter and change data through regular telephone lines or through 1G cell phones • Patients schedule doctors’ appointments • Users request pick-up from FedEx • Employees find information, select, or change benefits packages • Electric utilities can respond to customers reporting power outages Prentice Hall, 2003

  27. Voice Portals • Voice portal—aWeb 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 •—reminder and notification service • Helps businesses find new customers Prentice Hall, 2003

  28. 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) Prentice Hall, 2003

  29. 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 Prentice Hall, 2003

  30. Swedish Postal Bank Dagens Industri Citibank Japanese banks Hoover’s wireless ( ASB Bank (New Zealand) Boston’s Faneuil Hall Marketplace Examples of Financial Applications Prentice Hall, 2003

  31. Exhibit 8.6Bill Payments by Cell Phone Prentice Hall, 2003

  32. Shopping from Wireless Devices • 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 Prentice Hall, 2003

  33. Exhibit 8.7Mobile Shopping Supported by CRM Prentice Hall, 2003

  34. Targeted Advertisement • Personalization of services and enhanced user interface for wireless Web pages from • Knowing user preferences or surfing habits user-specific advertising messages to the location of mobile users • Using GPS marketers can send location-sensitive messages can be sent Prentice Hall, 2003

  35. Targeted Advertisement (cont.) • Get paid to listen to advertisements—listen to a 10–second ad before you dial your cell phone, and get 2 minutes of free long-distance time • Program flopped in the U.S. • SingTel of Singapore recouped its initial investment from ad revenues in about a year Prentice Hall, 2003

  36. Targeted Advertisement (cont.) • Advertisement strategies and guidelines—Wireless Advertising Association ( is trying to establish wireless ad guidelines • Opt-in ad programs involving mobile message alerts • Addressing issues like spamming and unethical strategies: • Confirmed opt-ins • Personally identifiable information • Push advertising Prentice Hall, 2003

  37. Wireless Advertising in Action • GPS helps target users from their location •—places to go and things to do in your area •—location-based start-up sent coupons to customers cell phones •—locations-based Web domain helps mobile travelers find anything (e.g., the nearest oil change) Prentice Hall, 2003

  38. Supporting Customers & Business Partners(Consumer Services) • Using voice portals in marketing and customer service • Use vendor’s voice portal to check status of deliveries to a job site • Service technicians provided with diagnostic information, enabling them diagnosis of difficult problems • Sales people check inventory status during a meeting to help close a sale Prentice Hall, 2003

  39. Supporting Customers & Business Partners(Consumer Services) [cont.] • Using mobile portals • Mobile portal—a customer interaction channel that aggregates content and services for mobile users • Portals charge for their services (per service or monthly fee): • Public mobile portals (e.g., Imode in Japan) • Corporateportals • Serve a corporation ’s customers and/or suppliers • E.g., major airline portals Prentice Hall, 2003

  40. 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 Prentice Hall, 2003

  41. Wearable Devices for Bell Canada Workers • Wearable technology • Powerful computer for pocket • Keyboard attached to the vest • Flatpanel display screen at the waist • Video camera attaches to his safety hat • Cell phone is attached and connected to the computer • Battery pack against the back Prentice Hall, 2003

  42. Wearable Devices (cont.) • Wearable devices enable workers to access: • Work orders • Repair manuals • This system was developed by Xybernaut ( • Problems with the technology are weather related Prentice Hall, 2003

  43. 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) Prentice Hall, 2003

  44. Supporting Mobile Employees (cont.) • Sales force automation (SFA) tools • Integrate software aimed at m-commerce applications • Equipped with smartphones providing easy access to customer data at the central office • Contact management information • Product and spare part availability • Deal tracking Prentice Hall, 2003

  45. 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 Prentice Hall, 2003

  46. 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 Prentice Hall, 2003

  47. Exhibit 8.9Automated Wireless Workflow Applications Prentice Hall, 2003

  48. Internet-BasedIntrabusiness Applications • Applications implemented inside enterprises, some examples: • Sonera (Finland): electronic funds transfer (EFT) of paychecks • Chicago’s United Center: inventory can be taken in a matter of hours • FedEx and UPS: access Web, e-mail, databases, intranets, etc. Prentice Hall, 2003

  49. Internet-BasedIntrabusiness Applications (cont.) • Bertelsmann AG: gives junior-level executives wireless access to a company portal, JuniorNet, accessible from almost anywhere • Kemper Insurance Company: lets property adjusters report from the scene of an accident • U.S. Internal Revenue Service: equipping field employees with mobile devices that allows audits to be conducted anywhere, anytime Prentice Hall, 2003

  50. Exhibit 8.10Intelligent Office Connected by Wireless LAN Prentice Hall, 2003