M-Commerce Consumer Business Applications

In this section, various business applications targeting the mobile consumer will be reviewed, and how they address the interdependence of the three areas already discussed in this chapter (i.e., wireless technology, m-consumer interaction, m-consumer needs/concerns) will be discussed. (This discussion is summarized in Table 4.) The characteristics identified for each business application, in the table, include the following:

• Consumer needs addressed by the business application (identified through this research).

• Interaction modes covered by the business application (based on Figure 2).

• Global market size (in users), unless otherwise noted, if available (sources are referenced in the table).

• Perceived value and willingness to pay for the business application (Daum, 2001; Wong, 2001).

• Concerns associated with the business application (referring to section "Matching m-commerce needs and concerns").

• Technology requirements for the business application (supported in the remaining discussion).

Table 4: Characteristics of M-Commerce Consumer Business Applications (Coursaris & Hassanein, 2002)

Business Application	Needs [a]				Interaction Mode	User market in millions, 2005 [b]	Value	Concerns	Technology Requirements [c]
	1	2	3	4
Communication
Voice	∏	∏	∏	∏	WB2C WC2C	1268	Highest	Cost, Privacy	1G / 2.5G, Voice module
SMS	∏	∏	∏	∏	WB2C WC2C	1268	Highest	Cost	2G / 2.5G, WAP 2.0
e-Mail	∏	∏	∏	∏	WB2C WC2C	200A (by 2004)	Highest	Cost	2G / 2.5G, WAP 2.0
Data Transfer	∏	∏	∏	∏	WB2C WC2C	2.8 (residential)	Highest	Cost	2.5G / 3G
					WC2	9.5 (Total)
Information
Web browsing	∏	∏	∏	∏	WB2C	614	Highest	Cost, Usability	2G / 2.5G / 3G, WAP 2.0
Traffic/Weather		∏			WB2C	N/A [d]	Highest	Privacy, Usability	2G / 2.5G, LBS [e]
Entertainment						775 (Total)
Gaming			∏	∏	WB2C WC2C	200B	Highest	Cost, Usability	2G / 2.5G / 3G, WAP 2.0
News/Sports		∏	∏	∏	WB2C	N/A	High	Cost, Usability, Privacy	2G / 2.5G
Downloading Music/Video/Img.			∏	∏	WB2C	N/A	Medium	Download times, Cost	2.5G / 3G, WAP 2.0
Horoscope/Lottery		∏	∏	∏	WB2C	N/A	Low	Cost, Privacy	2G
Commerce
Ticketing (e.g., Event, Cinema)		∏		∏	WB2C	N/A	Highest	Cost, Usability, Security, Privacy	2G / 2.5G
Pre-Payment				∏	WB2C	18.3 (by 2003)	Highest	Security	2G / 2.5G, Real-time Billing
Banking		∏		∏	WB2C	798	High	Security, Privacy	2G / 2.5G
Advertising		∏		∏	WB2C	$16–23 billion	Medium	Privacy (Spam)	2.5G/3G, LBS, WAP 2.0
Retailing		∏		∏	WB2C	469	Medium	Security, Privacy, Usability	2.5G / 3G, LBS, WAP 2.0
[a]TDMA: Time Division Multiple Access; CDMA: Code Division Multiple Access; GSM: Global System for Mobile Communications. [b]Source: allNetDevices, http://www.canvasdreams.com/viewarticle.cfmarticleid=941; except A = ARC Group, 1999, http://www.epsltd.com/IndustryInfo/Statistics/mobilestats.htm, and B = Datamonitor, 2000, http://cyberatlas.internet.com/markets/wireless/article/0,,10094_455141,00.html. [c]Available technology is in bold, while future technology is shown in normal font. (Note: 2.5G is available but is not yet widely used.) [d]N/A = Not Available. [e]LBS = Location-Based Service.

The applications presented in the table are those of highest interest to consumers, according to research (Daum, 2001; Wong, 2001), and they often address multiple needs. For example, mobile banking would include options to access a user's account to obtain a balance, transfer funds, and even proceed with trading securities. This application, therefore, satisfies both the need to access information as well as engage in commercial transactions. In general, applications have been grouped under a need area in the first column of Table 4, according to which need they predominantly cater.

Communication Applications

Satisfying communication needs represents the foundation for fulfilling all the remaining m-consumer needs. From the "Interaction Mode" column in Table 4, it is evident that only communication applications target all of the different consumer interaction modes. As such, these applications can cater to a wider audience, whose members appear to be more interested in and more willing to pay for this type of application.

Cost appears to be the primary concern and would thus require network carriers to revisit their pricing models, and consequently come up with various options (i.e., subscription, pay-per-use) in an attempt to satisfy different consumer preferences. Finally, with respect to technology, only "data transfer" is affected by the slow adoption of 2.5G, because voice, SMS, and e-mail can operate efficiently within existing technologies. Future enhancements exist in VoiceXML, the technology that will enable voice-driven applications, some of which are already available (e.g., speaking out the name of the person whose phone number is to be dialed). Enhancements are also expected in 3G networks and the WAP 2.0 protocol, which will support rich content in SMS and e-mail communications, as well as provide for higher transfer rates for data transfers.

Information Applications

These applications target the wireless B2C consumer interaction mode. A high consumer interest in these wireless information Web sites suggests an opportunity for content providers to start charging mobile consumers for their services (i.e., subscription, pay-per-use), if they are not doing so already.

Cost and usability take front stage in terms of m-consumer concerns, and along with network carriers and content providers rethinking their pricing models, content providers need to ensure a high level of usability to avoid customer dissatisfaction and potential market attrition.

Finally, 2.5G and 3G network technologies will help improve the wireless Web experience, and the available information could become rich in form, yielding higher customer appreciation and interest. In addition, future location-based services could enable dynamic searching and comparison for location-specific information.

Entertainment Applications

Entertainment can involve various activities, some of which can satisfy various types of m-consumer needs. Gaming currently appears to be the hottest segment, with emphasis on the teenage and young adult communities (Ovum, 2001). Until recently, however, this offering was limited due to protocol constraints (WAP did not allow for graphics and rich content). The next generation of protocols should be able to address this problem. As usual, cost and usability are in the foreground as concerns, along with download times. For cost, downloads can be purchased individually or through a subscription, giving m-consumers added flexibility. A mobile user may seek entertainment for a short interval on a spontaneous basis. Therefore, excessive download times will not be well received. Finally, 2.5G and 3G network technologies, along with the introduction of WAP 2.0, will help improve not only the gaming experience but also other entertainment-related applications (Harmer, 2001).

Commerce Applications

Although gaming appears to be the short-term cash cow for m-commerce, mobile banking presents the primary application for generating the much-needed critical mass in the near future, which in turn, can yield significant revenues. In addition, banking is an application that is not a passing fad and is not subject to the latest video and audio technologies; rather, it is an important provision for mobile consumers and their need to save time from routine activities, such as going to the bank to pay a bill. Mobile banking is a key application for supporting the mobile payment mechanisms needed for other m-commerce applications to take place.

Cost and usability are present concerns once again, but due to the sensitive nature of the information exchanged in a commercial transaction, security and privacy concerns prevail. The limitation in addressing these concerns effectively today lies in the existing infrastructure. The two main points of potential hack attacks were identified earlier in the chapter and were found to be the "Two-Zone problem" or the "WAP Gap" as well as "eavesdropping." The WAP Gap can be addressed effectively in devices accessing GSM networks, as these devices handle the conversion from WTLS to SSL internally on the SIM (Subscriber Identity Module) card and, therefore, minimize the risk of a hack attack and improve overall performance as airtime required for conversion is reduced. Other options are explored through new technologies, including WIM (Wireless Identification Module) cards that are similar in functionality to SIM cards for non-GSM phones, and J2ME-enabled handsets, which allow the handset to send and receive content directly to and from the HTML server, respectively, without the need for an intermediate gateway (Schwartz, 2000). On the other hand, protection against eavesdropping would require more efficient encryption algorithms (e.g., 128-bit) as well as supporting wireless technology enabling these algorithms (e.g., more powerful wireless devices that are not constrained by battery life or memory). Also, frequently, security features are sidestepped in return for time benefits (mobile users omit or deactivate security features to save on transmission time). Therefore, until security enhancements to wireless technology are in place, mobile users may be reluctant to take advantage of these applications. Finally, m-commerce industry players need to implement sufficient content to serve as incentive for not only converting consumers to mobile users but also retaining these mobile users for the long run.