1. Chapter 8 Mobile Commerce
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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
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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
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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
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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
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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
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7. Exhibit 8.1 NextBus Operational Model
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8. 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
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9. Exhibit 8.2 Classes of M-Commerce Applications
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10. M-Commerce Terminology
Generations
1G: wireless technology
2G: current wireless technology; mainly accommodates text
2.5G: interim technology accommodates graphics
3G: 3rd generation technology ( ) supports rich media (video clips)
4G: will provide faster multimedia display ( )
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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
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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
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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
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14. Exhibit 8.3 Characteristics of M-Commerce
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15. The Drivers Widespread availability of devices Declining prices
No need for a PC
Handset culture
Vendors’ push
Declining prices
Improvement of bandwidth
Explosion of EC in general
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16. Mobile Computing Infrastructure
Hardware
Screenphones—a telephone equipped with color screen, keyboard, , and Internet capabilities
handhelds
Wirelined—connected by wires to a network
Cellular (mobile) phones
Attachable keyboard
PDAs
Interactive pagers
Other devices
Notebooks
Handhelds
Smartpads
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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
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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
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19. Mobile Computing Infrastructure (cont.)
Networks and access
Wireless transmission media
Microwave
Satellites
Radio
Infrared
Cellular radio technology
Wireless systems
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20. Exhibit 8.5 Delta Airlines Wireless System
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21. Wireless Standards and Security
M-commerce supported by
Standards
Security
Voice systems
M-commerce
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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 (Wi-Fi)
Wideband CDMA
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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
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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)
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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
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26. Interactive Voice Response
Interactive voice response (IVR)—a computer 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
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27. 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
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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)
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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
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30. 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
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31. Exhibit 8.6 Bill Payments by Cell Phone
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32. 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
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33. Exhibit 8.7 Mobile Shopping Supported by CRM
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34. 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
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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
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36. 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
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37. 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)
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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
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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)
Corporate portals
Serve a corporation ’s customers and/or suppliers
E.g., major airline portals
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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
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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
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42. 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
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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)
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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
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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
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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
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47. Exhibit 8.9 Automated Wireless Workflow Applications
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48. Internet-Based Intrabusiness 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, , databases, intranets, etc.
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49. Internet-Based Intrabusiness 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
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50. Exhibit 8.10 Intelligent Office Connected by Wireless LAN
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51. 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 chain efficiency 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
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52. 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
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53. 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
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54. Exhibit 8.13 Intelligent Home Connected by Wireless LAN
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55. 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
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56. 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
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57. 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
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58. 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
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59. 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
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60. 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?”
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61. 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
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62. Exhibit 8.14 Location-Based Services Involving Maps
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63. Exhibit 8.15 GPS System
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64. 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
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65. 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
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66. 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
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67. Barriers to L-Commerce
The accuracy of some of the location technologies
The cost-benefit justification
M-spam
The bandwidth of GSM networks
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68. 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
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69. 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
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70. 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)
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71. 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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72. Implementing M-Commerce
Revenue models
Payment clearing
Hosting fees
Certification (PKI) fees
Basic (fixed) fees
Point-of-traffic fees
Transaction fees
Content and service charges
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73. 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
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74. 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
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75. Managerial Issues What is our timetable? Which applications first?
Is it real or just a buzzword?
Which system to use?
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76. 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
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