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Chapter 8 Mobile Commerce. 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.

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chapter 8 mobile commerce

Chapter 8Mobile Commerce

Prentice Hall, 2003

learning objectives
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

learning objectives cont
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

learning objectives cont4
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

nextbus a superb customer service
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

nextbus cont
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

mobile commerce overview
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

m commerce terminology
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

terminology and standards
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

specific attributes of m commerce
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

attributes of m commerce cont
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

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

The Drivers

Prentice Hall, 2003

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

Mobile Computing Infrastructure
  • Hardware

Prentice Hall, 2003

mobile computing infrastructure cont
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

mobile computing infrastructure cont18
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

mobile computing infrastructure cont19
Mobile Computing Infrastructure (cont.)
  • Networks and access
    • Wireless transmission media
      • Microwave
      • Satellites
      • Radio
      • Infrared
      • Cellular radio technology
    • Wireless systems

Prentice Hall, 2003

wireless standards and security
Wireless Standards and Security
  • M-commerce supported by
    • Standards
    • Security
    • Voice systems

M-commerce

Prentice Hall, 2003

wireless standards
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

wireless standards cont
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

security issues
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

voice systems for m commerce
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

interactive voice response
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

voice portals
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
    • Iping.com—reminder and notification service
    • Helps businesses find new customers

Prentice Hall, 2003

mobile financial applications
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

mobile financial applications cont
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

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

Examples of Financial Applications

Prentice Hall, 2003

shopping from wireless devices
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

Prentice Hall, 2003

targeted advertisement
Targeted Advertisement
  • Personalization of services and enhanced user interface for wireless Web pages from barnesandnoble.com
    • 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

targeted advertisement cont
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

targeted advertisement cont36
Targeted Advertisement (cont.)
  • Advertisement strategies and guidelines—Wireless Advertising Association (waaglobal.org) 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

wireless advertising in action
Wireless Advertising in Action
  • GPS helps target users from their location
    • Vindigo.com—places to go and things to do in your area
    • GeePS.com—location-based start-up sent coupons to customers cell phones
    • Go2Online.com—locations-based Web domain helps mobile travelers find anything (e.g., the nearest oil change)

Prentice Hall, 2003

supporting customers business partners consumer services
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

supporting customers business partners consumer services cont
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

supporting mobile employees
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

wearable devices for bell canada workers
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

wearable devices cont
Wearable Devices (cont.)
  • Wearable devices enable workers to access:
    • Work orders
    • Repair manuals
  • This system was developed by Xybernaut (xybernaut.com)
  • Problems with the technology are weather related

Prentice Hall, 2003

supporting mobile employees cont
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

supporting mobile employees cont44
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

non internet intrabusiness applications
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

non internet intrabusiness applications cont
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

internet based intrabusiness applications
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

internet based intrabusiness applications cont
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

mobile b2b and supply chain applications
Mobile B2B and Supply Chain Applications
  • Both sell-side and buy-side of ERP
  • Unified messaging makes user’s device less of an issue
    • Telemetry drives supply chainefficiency and productivity through automation of:
      • Data capture
      • Improved billing timeliness and accuracy
      • Reduced overhead
      • Increased customer satisfaction
    • Collaboration among members of the supply chain is facilitated by mobile capabilities

Prentice Hall, 2003

mobile consumer and personal service applications
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

Prentice Hall, 2003

mobile consumer and personal service applications cont
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

Prentice Hall, 2003

mobile consumer and personal service applications cont55
Mobile Consumer and Personal Service Applications (cont.)
  • 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

Prentice Hall, 2003

mobile consumer and personal service applications cont56
Mobile Consumer and Personal Service Applications (cont.)
  • 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

Prentice Hall, 2003

highway 91 project cont
Highway 91 Project (cont.)
  • Six express toll lanes along a 10–mile stretch in the median of the existing Highway 91
  • Express lane system has only one entrance and one exit, and it is totally operated with EC technologies

Prentice Hall, 2003

highway 91 project cont58
Highway 91 Project (cont.)
  • The system works:
    • Only prepaid subscribers can drive on the road
    • Large sign over the toll way tells drivers current fee for cruising the express lanes
    • Sensors in the pavement let the toll way computer know that a car has entered; the car does not need to slow or stop
    • AVI makes radio contact with a transceiver installed above the lane

Prentice Hall, 2003

highway 91 project cont59
Highway 91 Project (cont.)
  • The transceiver relays the car’s identity to the control center, where a computer calculates the fee for that day’s trip
  • Surveillance cameras record the license numbers of cars without AVIs—can be stopped by police at the exit or fined by mail
  • Video cameras along the toll way enable managers to keep tabs on traffic
  • System accesses the driver’s account and the fare is automatically deducted from the driver’s prepaid account

Prentice Hall, 2003

highway 91 project cont60
Highway 91 Project (cont.)
  • System saves commuters between 40 and 90 minutes each day, so it is in high demand
  • Use of the same AVIs for other purposes:
    • Used in paid parking lots
    • Someday you may be recognized when you enter the drive-through lane of McDonalds and a voice asks you, “Mr. Smart, do you want your usual meal today?”

Prentice Hall, 2003

location based commerce
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

Prentice Hall, 2003

exhibit 8 15 gps system
Exhibit 8.15GPS System

Prentice Hall, 2003

l commerce applications cont
L-Commerce Applications (cont.)
  • E-911—Calls from cellular phones to providers of emergency services
    • Wireless carriers must provide feature that allows them to identify number and location of the user
    • Mobile 911 calls must be forwarded immediately to the appropriate agency
  • Automatic crash notification (ACN)—device (now experimental) that will automatically notify police of a vehicular accident

Prentice Hall, 2003

telematics and telemetry applications
Telematics and Telemetry Applications
  • 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

Prentice Hall, 2003

telematics and telemetry applications cont
Telematics and Telemetry Applications (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

Prentice Hall, 2003

barriers to l commerce
Barriers to L-Commerce
  • The accuracy of some of the location technologies
  • The cost-benefit justification
  • M-spam
  • The bandwidth of GSM networks

Prentice Hall, 2003

limitations of m commerce
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

Prentice Hall, 2003

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

Prentice Hall, 2003

technical limitations cont
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)

Prentice Hall, 2003

technical limitations cont71
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)

Prentice Hall, 2003

implementing m commerce
Basic (fixed) fees

Point-of-traffic fees

Transaction fees

Content and service charges

Payment clearing

Hosting fees

Certification (PKI) fees

Implementing M-Commerce
  • Revenue models

Prentice Hall, 2003

implementing m commerce cont
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

Prentice Hall, 2003

implementing m commerce cont74
Implementing M-Commerce (cont.)
  • M-commerce value chain
    • Involves many partners
    • Success depends on
      • Coordination among participants
      • Sufficient compensation for all
    • Use ASP to deliver m-commerce or
    • Large companies contract other vendors to complement their services

Prentice Hall, 2003

managerial issues
Managerial Issues
  • What is our timetable?
  • Which applications first?
  • Is it real or just a buzzword?
  • Which system to use?

Prentice Hall, 2003

summary
Characteristics and attributes of m-commerce

Drivers of m-commerce

Supporting technologies

Wireless standards and technologies

Finance and marketing applications

Intrabusiness applications

B2B applications

Consumer applications

Non-Internet applications

L-commerce

Limitations of m-commerce

Summary

Prentice Hall, 2003