1. ITEC0722: Mobile Business and Implementation: Mobile Commerce Suronapee Phoomvuthisarn, Ph.D. suronape@mut.ac.th

2. Mobile Commerce http://www.forbes.com/sites/chuckjones/2013/10/02/ecommerce- is-growing-nicely-while-mcommerce-is-on-a-tear/

3. Outline Introduction to Mobile Commerce – Characteristics of M-commerce – M-Commerce vs E-Commerce – M-Commerce Services M-Commerce Business Models (BMs) – Definition – Business Models’ Key Elements – Revenue Model s for M-Commerce’s BMs Challenge

4. Introduction to Mobile Commerce Definition – “The use of wireless handheld devices such as cellular phones and laptops to conduct commercial transactions online.” M-commerce is e-commerce preformed via a mobile phone or other mobile device. – Also known as m-commerce or mCommerce

5. Purchased goods through m- commerce channels "The history of m-commerce began in the early 2000s, when retailers started offering mobile device add-ons such as ringtones, games, wallpapers and screensavers. By 2009, the offers over mobile phones had evolved significantly. Specifically, out of all consumers that purchased goods through m-commerce channels in the United States: 58% purchased digital content (such as music or apps), 51% consumer electronics, 37% computers/laptops/related equipment, 36% books, 31% apparel and 20% jewelry.”retailersmobile deviceadd-onsringtonesgameswallpapers screensaversmobile phonesconsumersgoodsdigital contentmusic appsconsumer electronicscomputerslaptopsbooks

6. Characteristics of M-Commerce

7. E-commerce vs M-commerce FactorE-CommerceM-Commerce Product or service focusProduct focusService focus Product or service provisionWired Global accessWireless Global access Product or service assetsStatic information and dataDynamic location-based data Product or service attractionFixed non-time-constrained access Mobility and Portability of access

8. E-commerce vs M-commerce (2) FactorE-CommerceM-Commerce Personal DevicesPC: MediumMobile phone : High Network Operators can determine the services NoYes, like a gatekeeper User ’ s LocationHard to findNetwork Operator know who you are, where you are, can direct you to the portal of choice, and can charge you money Display Screen Size and MemoryMediumSmall Click through rates for banner AD and e-Mail (i-mode) PC Less than 0.5%3.6%; 24% Powerpoint of M-commerce Strategy

9. M-Commerce Services Financial – Secure banking services Entertainment – Mobile Gambling Shopping – Purchase of goods Information services – News In-application mobile phone payments – Games Mobile Advertisement Mobile ticketing

10. Business Models Definitions of business model “the blueprint of how a company does business. Osterwalder et al. (2005) ‘‘the totality of how a company selects its customers, defines and differentiates it offerings, defines the tasks it will perform itself and those it will outsource, configures its resources, goes to market, creates utility for customers and captures profits.’’ Slywotzky (1996)

11. Business Models’ Key Elements

12. E-Commerce Business Models Phillips, B., Business Driven Information System, 2008

13. M-Commerce Business Models Type of M-Commerce Business Models (General) – Businesses – involving a Wireless Business-to- Consumer (W B2C ) interaction mode. It is important to note that most such interactions would naturally involve a Wireless Consumer-to-Business (W C2B ) interaction mode as well. – Consumers – Involving a Wireless Consumer-to- Consumer (W C2C ) mode of interaction. – Businesses – Involving a Wireless Consumer-to- Business (W B2B ) mode of interaction. –

14. Business Models (Revenue in Mobile context) User Fee Business Models Shopping Business Models Marketing Business Models Improved Efficiency Business Models Advertising Business Models Revenue-Sharing Business Models

15. User Fee Business Models Type of fees – Subscription fees – usage fees Charge for actual usage of a service Often involves relying on 3 rd party billing providers or network operators to collect fees Powerpoint of Mobile Commerce Business Models,Business intelligence, Sadat Academy for management sciences

16. Shopping Business Models Like wired e-tailers, another distribution channel Examples : eBay, Amazon etc. Powerpoint of Mobile Commerce Business Models,Business intelligence, Sadat Academy for management sciences

17. Marketing Business Models Mobile presence is subsidized company’s core business – using the mobile Internet as a marketing channel rather than as an actual sales channel Powerpoint of Mobile Commerce Business Models,Business intelligence, Sadat Academy for management sciences

18. Improved Efficiency Business Models cut costs and improve customer satisfaction – mobile banking – mobile ticketing This model help reducing operating costs such as expenses on personnel at branch offices, call centers, ticketing booths, and counters.. Powerpoint of Mobile Commerce Business Models,Business intelligence, Sadat Academy for management sciences

19. Advertising Business Models Flat Fees – Charge flat fee for displaying advertisement over a period of time Traffic-based Fees – Paying based on the number of times an advertisement is placed -> cost per thousand ads impression (CPM) Performance-based Fees – Fees based on the number of click-throughs or call-throughs -> cost per click and cost per acquisition, respectively

20. Advertising Business Models (2) Powerpoint of Mobile Commerce Business Models,Business intelligence, Sadat Academy for management sciences

21. Revenue-Sharing Business Models Companies’ partnership arrangements – collecting payment from users and redistributing it across the different parties involved in delivering the service – Examples: local weather updates, traffic conditions, news updates, and games and other entertainment services. Powerpoint of Mobile Commerce Business Models,Business intelligence, Sadat Academy for management sciences

22. Other Business Models Razor and blades model. – The seller sells one product for free or very low cost hoping to sell a complementary product at high margins. Brokerage/Marketplace model. – matches buyers and sellers in usually auction like model and take a commission on the sales. Freemium model – a company sells out two services – one for free but with limited features, and one for premium with full features.

23. Other Business Models (2) Network effect model. – business tries to focus mainly on building more users and making money eventually through selling users data or advertisements. In-app commerce. – For example, in a game, the game is given for free or low cost, but additional enhancements in the game can be bought for a price. Certification & verification. – Usually a role of non-profit organizations like ISO and universities, this is also getting commercial.

24. Mobile apps: which Business Model is best? According to Gartner,Gartner – within 2017, 94,5% of downloaded apps will be free for users. Us, the users, will pay only five apps on a hundred. – 90% of paid apps do not reach 500 daily download and generates less than 1.250 Dollars per day. Revenue or users?

25. Examples B2C Models: Content Provider – Digital content on the Web News, music, video – Revenue models: Subscription (pay per download (micropayment)); advertising B2C Models: Market Creator – Create digital environment where buyers and sellers can meet and transact (Examples: eBay) – Revenue model: Brokerage Model (Transaction fees)

26. Examples B2C Models: Service Provider – Online services e.g., Google—Google Maps, Gmail, etc. – Value proposition Valuable, convenient, time-saving, low-cost alternatives to traditional service providers – Revenue models: Sales of services, subscription fees, advertising, marketing business model

27. Examples B2C Models: Community Provider – Provide online environment (social network) where people with similar interests can transact, share content, and communicate e.g., Facebook, LinkedIn, Twitter – Revenue models: Advertising, subscriptions, shopping business model

28. Challenges Efficient and fast wireless telecommunications services are often focused within specific area Wireless Mobile Internet access more costly than wired Internet access Concerns over privacy and security still pervade the wireless data transmission world

29. Task Work on a group of 3 people or less – Pick a mobile commerce application and describe its key elements of the business model – Give a presentation at the end of the class

30. Reference http://www.investopedia.com/terms/m/mobile-commerce.asp http://itlaw.wikia.com/wiki/Mobile_commerce http://en.wikibooks.org/wiki/The_Computer_Revolution/E_commerce/M-commerce http://en.wikipedia.org/wiki/Mobile_commerce http://en.wikipedia.org/wiki/Subscription_business_model http://theagni.com/2011/12/02/how-to-build-revenue-24-types-of-major-business- models-with-examples/ http://theagni.com/2011/12/02/how-to-build-revenue-24-types-of-major-business- models-with-examples/ http://articles.bplans.co.uk/starting-a-business/examples-of-well-known-business- models/1040 http://articles.bplans.co.uk/starting-a-business/examples-of-well-known-business- models/1040 http://en.wikipedia.org/wiki/Business_model Laudon, K.C., E-commerce business technology society, 8 th edition Laudon, K.C., E-commerce business technology society, 8 th edition http://en.wikibooks.org/wiki/The_Computer_Revolution/E_commerce/M-commerce Elliott, G.; Phillips, N., Mobile Commerce and Wireless Computing Systems, Pearson Educations Limited, England. 2004 Barnes, Stuart J. And Huff, Sid L., “Rising Sun: iMode and the Wireless Internet”, Communications of The ACM, Nov.2003, Vol. 46, No. 11, pp. 79-84.