Nikhilesh Dholakia University of Rhode Island, USA
Morten Rask
Aarhus School of Business, Denmark
Ruby Roy Dholakia University of Rhode Island, USA
aBstract
In this keynote chapter, we provide an overview of the emerging global landscape of mobile communications and mobile commerce, circa 2005. We introduce the four core CLIP func-tionalities—communications (C), locatability (L), information (I), exchange and payment (P) facilitation—on which mobile commerce systems and services are based. We then explore the vari-ous requirements for creating successful mobile commerce portals, or m-portals, using the CLIP functionalities as well as ways for personalization, permission and specification of service formats and content.
tectonIc shIFts In gloBal moBIle communIcatIons
In 2004, the nation of China was adding five million new mobile telephone customers every month. That is the equivalent of adding the whole nation of Denmark, or Finland, every month to the mobile user base of the world’s most populous country. India, the world’s second most populous nation, was far behind China, but its mobile user base was also galloping ahead at a phenomenal pace. By 2005, India had, by some estimates, over 79 million users and various observers expected the number to double in 12-18 months.
While emerging nations such as China, India, Vietnam and South Africa were adding mobile telecom users at a phenomenal rate, in the advanced countries with very high mobile penetration rates, the race was on to promote new patterns of life based on mobile technologies. Take the example of the United States. Although the U.S. was slower than most European nations and the leading Asian nations in terms of mobile technology penetration and mobile data applications, by the mid-2000s a distinct pattern of making mobile communications and applications ubiquitous was becoming evident in many American cities (see Box 1 “The Race to Ubiquitous Mobile Connectivity”).
Mobile commerce, or m-commerce, refers to monetary transactions conducted via a mobile telecommunications network using devices such as mobile phones, personal digital assistants (PDAs), enhanced alphanumeric handheld gadgets and so on. The global wireless mobile networks of various kinds, and the user bases of such
networks, constitute the bedrock infrastructure of mobile commerce. The growing variety of terminal devices and services are the facilitative and revenue-producing tentacles of the mobile telecommunications networks. Together, the net-work, the devices and the services constitute the growing, globalizing and ever morphing “mobile ecosystem.”
As we survey the mobile ecosystem circa 2005, tectonic shifts are occurring in it. Such shifts will continue into the foreseeable future. Including the explosive growth in Asia’s mobile user base, the following represent the main tectonic shifts expected to shape the mobile commerce landscape for decades:
• Emergence of China as the world’s biggest mobile communications market and the likely impact of this on everything from services to technical standards.
Towards the end of 2005, many cities in the United States started receiving proposals from a variety of information technology companies to blanket the entire city with Wi-Fi mobile con-nectivity. For example:
• Google proposed to make the entire city of San Francisco into a large, urban Wi-Fi network.
Users would of course be able to take their laptops and be connected to the Internet. With the newly launched “Google Talk” service, using VOIP technology, users would also be able to make
• Earthlink, a major Internet Service Provider, similarly offered to blanket the city of Philadelphia with a ubiquitous Wi-Fi network, and to offer highly discounted services to Earthlink users while on the move anywhere in the city.
• Intel, the maker of the Centrino and other mobile data communications chips, launched programs for Wi-Fi blanketing not only in the United States but also in a dozen cities across the world.
These offers of “Wi-Fi blanketing” were of course made because of the obvious commercial benefits to the firms making these offers. While these developments of creating ubiquitous urban mobile networks were going on, the venture capital firms in the United States were bank rolling a large number of startup companies developing mobile applications.
Of course, looking into the future, many uncertainties and glitches remain. But it is almost certain that certain areas in the United States would become so saturated with free or nearly free mobile networks that people would begin to reorient their lifestyles – carrying a single mobile device of some type that would be phone, a wallet, and a browser all rolled into one.
Source: Authors’ research.
Box 1. The Race to Ubiquitous Mobile Connectivity
• Emergence and rapid growth of a massive mobile user base in the low-income economy of India, paving the way for super-discounted services.
• Launching of third generation (3G) services in Europe, Asia, North America and else-where. The advanced 3G and the soon-to-follow 4G networks provide super-fast data speeds capable of opening the gates for new classes of mobile commerce offerings.
• Increasing degrees of “convergence” across various mobile communications formats (cellular, Wi-Fi, WLAN, RFID, Bluetooth and satellite-aided) and between mobile media and other communications media (landlines, cable TV, broadcast and satellite TV) and other information technologies (the Internet and computers). Each instance of convergence opens new product and service possibilities.
• Complex interplay of “standards” (CDMA, TDMA and GSM — just to name some of the cellular standards) and “generations”
(2G, 2.5G, 3G, 4G, etc.). Incompatibilities of standards create barriers, but they also present opportunities for multi-format and integrative devices and services.
Because of these ongoing shifts and complexi-ties, it is difficult to fit neat conceptual frameworks on the patterns of evolution of mobile services and mobile commerce. Nonetheless, conceptual structures are necessary for strategic purposes as well as for the practical need of training hundreds of thousands of people to work effectively in the mobile sector. In this keynote chapter, we pres-ent some basic precepts, cutting across global regions and technology formats, to help tame the complexities of mobile commerce services.
structure of this chapter
We begin by providing a simple definition of mobile commerce, and then review the four core
ingredients — Communications (C), Locatability (L), Information (I) provision and Payment (P) facilitation — that underlie most mobile com-merce applications.
Next, we introduce the idea of a mobile com-merce portal, or m-portal, the electronic window through which users become aware of and deal with m-services. We outline success requirements for building versatile and appealing m-portals, based on thorough integration of functionalities.
Additional factors that lead to mobile commerce success — personalization of content, permission seeking and specification of formats and content
— are discussed. Finally, we reflect on elements that service partners of m-portals should pay atten-tion to, and provide conclusions and an overview of the country perspectives that constitute the remaining chapters of this book.
m-commerce: the core “clIP”
IngredIents
M-commerce refers to monetary transactions conducted via a mobile telecommunications network by employing devices such as mobile phones or palmtop units. For mobile commerce to happen, at the minimum the device and the network should be configured to enable com-munications (C), information (I) exchange and payments (P). Adding the additional geographical dimension of “locatability” (L) creates the CLIP
— Communications, Location, Information and Payment — framework. CLIP functionalities are very useful for designing mobile portals (or m-portals) and providing mobile services.
The winners of the battle for leadership will be the m-portals that can utilize the key success factors for m-commerce — mobility and locat-ability — with a high degree of integration. Even though we are in the initial stage of m-commerce, where locatability is not fully implemented, ef-fective business strategies for mobile commerce in the future hinge on locatability in addition to
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the other core functions: communication, infor-mation and payment.
The communication (C) applications include the basic offerings of Internet service providers (ISPs), fixed-line service providers (FSPs) and wireless service providers (WSPs). Regarding voice, most mobile phones handle calls supplied by both WSPs and FSPs. Text messages come in multiple flavors like e-mail, fax, SMS (Short Message Services) and MMS (Multimedia Mes-sage Services). In many countries it is possible to route calls from the FSP to the WSP and to get e-mail messages forwarded to mobile phones or other handheld devices. Sometimes, to accomplish such integration, users have to buy a mobile phone that is WAP-enabled or can handle POP3 protocol and therefore accept e-mail. In order words, if the user chooses the right service provider and buys the right mobile device, the communication (C) functionalities could be fully integrated.
The state-of-the-art regarding information (I) delivery circa 2005 relied on SMS, MMS, WAP and Web. In the simplest versions, text-based data can be accessed. Many m-portals team up with content providers to deliver news and entertain-ment, and some also give access to the employing company’s information system and/or private information stored in a personal information manager such as MS Outlook. Multimedia and streaming video content are gradually becoming available via network enhancements (transition to 3G networks) and device enhancements (phones with cameras).
When it comes to payment (P) functions re-quiring efficient and secure exchange of financial data, the methods of integration are still evolving.
We are not aware of any portal that can handle stock trades, m-banking, e-wallet and billing at the same time. Terminals and services offering separate applications of these types do exist in some countries. Billing information flows directly form the WSP to the mobile end user as SMS.
Most of the larger Scandinavian banks offer m-banking solutions with stock trades included.
E-wallet trials are also available in Scandinavia, focused on payment in supermarkets, for parking and paying highway tolls.
Locatability (L) functionalities are also still evolving. These are based upon geo-coded data.
Aggregation and integration of such data are still at low levels. We are aware of mapmakers making it possible to download maps to palmtop units that also can be equipped with a GPS receiver.
Also, some trials are underway where users can get the location of the nearest restaurant, bar or convenience store based upon geographical po-sition determined by the WSP. Most geo-coded datasets, however, are not yet available in ways that m-portals can use to personalize CLIP func-tions.
m-Portal: user’s WIndoW to m-commerce
Users interact with mobile communications and mobile commerce systems through the small screen-based interface on their handheld devices.
To the users, this small screen opens up an elec-tronic window to the world. Besides text, tones and icons, the mobile device can also potentially offer music, photos, video, animation and other types of content. Of course, both the network and the device have to be advanced for such multimedia content to flow to the user.
To the users, the handheld device — and es-pecially the small screen — represent the mobile portal, or m-portal, the gateway to mobile services.
For service providers and device makers, the challenge is to make the m-portal versatile and capable in CLIP terms, so as to seamlessly and easily deliver a range of services to the users.
Profiling a Versatile M-Portal
To illustrate, consider the case of Angela, a sales engineer traveling from Stockholm’s Arlanda airport to Tokyo’s Narita airport. Upon arrival
at Narita airport, her CLIP device automatically shifts from her Stockholm portal to the Tokyo portal and only shows the links relevant to Angela and Tokyo. When she enters a convenience store at the Narita airport terminal, the m-portal lists goods offered in that store based on her previ-ous purchase history — even pointing out the shelf location of Financial Times, her favorite newspaper, and her preferred flavor of Altoid mints. After some personal shopping while on the hour-long Narita Express train ride to downtown Tokyo and the New Otani hotel, Angela checks her CLIP device for new e-mail messages. In one of the e-mails, a new purchasing officer at Fuji Xerox, the Japanese client firm she has come to visit, introduces himself and explains that he will be at Angela’s impending sales presentation. At the Wi-Fi enabled New Otani hotel, Angela uses her mobile device as a remote control, and on the flat plasma TV screen checks out the profile of the purchasing officer on the client company’s WAP site. After a quick shower and change, as she heads to the client’s offices in a taxi, Angela adjusts two slides of her presentation located on her own company’s Intranet, and leaves the taxi, paying with the e-wallet equipped mobile CLIP device.
The m-portal is an individual-specific portal tailored for both personal and professional tasks.
In addition to the personalization features evi-dent in the Tokyo trip illustration, the m-portal is PIM-based.1 It can draw on all of Angela’s contact, schedule and task information and use such information to automatically generate the contents of the portal. The success of the m-portal depends on a continuous-loop personalization.
Such a personalization makes it very difficult to maintain the distinction between Angela’s private and professional lives. It is entirely possible, for example, that a musical greeting card sent by her 7-year old son back home in Stockholm could pop-up on the handheld screen in the middle of the sales meeting in Tokyo. Angela needs to ensure that her handheld device is programmed to keep
a discrete line of separation between personal and professional content.
Figure 1 shows the need for integration, which is the primary key success factor for the m-portal.
All the four CLIP functionalities need to work well within each individual function (e.g., integrating various payment types [P], such as from e-wallet and credit cards) and across the CLIP functions (e.g., Angela’s locatability [L] at Narita trigger-ing information [I] about the availability of her favorite flavor of Altoid mint, and enabling her to pay [P] for the purchase). Figure 1 illustrates the business opportunities for the m-portal, where the arrows symbolize the needed integration. The first-level integration of the communication, loca-tion, information and payment functions happens in the CLIP device. The figure also shows that the m-portal owner has to integrate already exist-ing offerexist-ings or build applications that integrate the possible wireless data flows, aggregations and sources. Seamless and smooth-functioning partnerships with shared revenue are needed for effective integration of sources and services.
In the initial phase of the evolution of
m-com-C G eograpositiophicaln G eo-codataded W ireless data &
voice flow G eograpositiophicaln G eo-codataded W ireless data &
voice flow CLIP
functions W ireless data & Aggregation Source voice flow
CLIP functions
User User
Figure 1. CLIP integration requirements for an m-portal
merce, for some of the larger players, the key strategic goal will be to attain a leadership posi-tion in the m-services space, i.e., to become an m-portal. For other firms, and for the firms that fail to become m-portals, strategies will have to evolve in terms of becoming effective m-portal service partners. While it is too early to predict what the competitive field of m-commerce will look like in various global regions, we can utilize Figure 1 to delineate some of the success require-ments. We can do so for three situations: the global battles for leadership in the m-commerce space, the strategic requirements for the leading suc-cessful m-portals and the strategic requirements for m-portal service partners.
dynamIcs oF leadershIP In m-commerce sPace
It is evident from Figure 1 that the Wireless Service Providers (WSPs) are well positioned for attaining leadership positions in the m-com-merce business space. Besides being in charge of the wireless data and voice flow to and from the CLIP device, WSPs also have access to sources that provide the value-adding communication, location, information and payment features. Ad-ditionally, some WSPs are also building applica-tions that access the information systems of the users’ employers. For example, the Danish WSP Sonofon has teamed up with HP to create access to the company’s Intranet (Hewlett-Packard, 2000). In a report, the consultant firm Strategis Group Europe (2000a, 2000b) concludes that
“wireless portals will provide operators with key competitive edge in Europe” and the WSP and the device manufacturers have core competencies in creating m-portals. Durlacher, another European consultancy, suggests that WSPs team up with traditional Internet portals because they have complementary strengths. WSPs bring experi-ences with mobile communications, billing and location information to the table. These elements
represent the weaknesses of the traditional Internet portals that, in return, have strengths in portal configuration, content creation and presentation, application and partnering experiences (Müller-Veerse, 1999). Partnering will be a key success factor for m-portals, a theme that we will visit later in this chapter.
With the exception of Japan’s NTT DoCoMo (see Bradley & Sandoval, 2002; see also the Japan chapter in this volume), WSPs did not have a very good start in the m-portal business.2 There have also been a lot of teething troubles with the first version of the preferred WAP protocol. 3 Many WSPs bet on the previously used “walled garden”
content model, which restricts subscribers’ access to third party portals. That approach — limiting of services to a set controlled and promoted by the WSP —– had no success at all (see the Denmark chapter in this volume).4
The key success requirement for mobile com-merce is the seamless integration of mobility and locatability. In the case of Angela presented earlier in this chapter, her m-portal configured itself as she moved, first internationally from Stockholm to Tokyo, then locally in the Narita convenience store and then to her Wi-Fi enabled hotel room.
Leading mobile commerce portals would be those that offer high degrees of integration of CLIP services, based on location and context, for us-ers on the move. At the current stage of mobile commerce, the geo-capabilities of locatability are not fully implemented yet. Future business strate-gies for mobile commerce — especially in those global regions where 3G networks exist — must be based on locatability being a key feature of the mobile commerce network.
addItIonal elements For m-Portal success
To be effective and appealing, m-portals must blend elements of personalization, permission and specification of the CLIP features in m-commerce
services. From the prior experience of landline and desktop terminal-based e-commerce, we know that the e-commerce players that survived and thrived did a very good job of personalizing the content to the users, carefully seeking the users’
permission for various types of communications and services, and allowing the users to specify how the services and content should be presented to them. As Table 1 shows, for m-commerce these three elements — personalization, permission and specification — take on an even stronger role than for e-commerce.
The essential task of the m-portal is to be an intermediary between service provider and user, and a mediator between multiple media and service formats. In principle, the m-portal can
The essential task of the m-portal is to be an intermediary between service provider and user, and a mediator between multiple media and service formats. In principle, the m-portal can