22.12 Future Impact: Generation W in a Wireless World

22.12 Future Impact: Generation "W" in a Wireless World

A new study by International Data Corporation predicts that the number of wireless Internet subscribers will jump from 5 million in 2000 to nearly 300 million in just 3 years. That would account for more than half of all Internet users worldwide. WAP's impact on mobile data would be similar to what Netscape's impact was for the Internet: to provide an attractive and notionally transparent portal to the cyber world, which had more than 200 million users in September 1999, in addition to thousands of corporate intranets. For E-commerce providers, that portal provides a potential user base of more than 400 million mobile subscribers worldwide because the Internet is ultimately about E-commerce. Although it includes a vast range of so-called "free" services — e-mail, social networks, consumer networks, a range of educational tools, computer games, and more — it is all about global economic activity and productivity. For the vast majority of fixed-network Internet users, E-commerce is still essentially only 1 to 3 years old; Amazon.com was not a household word in 1996. Internet banking, brokering, and financial services were not yet deployed into the mass market.

Yet this E-commerce world of B2B, retail banking, brokering, insurance, financial services, and purchase of almost any good or service is commonplace. There is no reason why the Internet space should not be embraced by mobile users in the same manner, subject to some differences in their marketing profile. ^[17] Salespeople, for example, are provided, through a wireless database access, the information needed to close a deal on the spot. Prices and delivery dates can be checked, orders can be entered, and even payments can be made without stepping outside the customer's office. That boosts the hit ratio, eliminates paperwork (and low-level administrative positions), improves customer service, and speeds cash flow.

Similar to the Internet revolution, this mobile makeover will change forever the way companies do business. Out of the office will no longer mean out of touch. In fact, remote employees may make wireless a way of life, so they do not have to dial in for e-mail and other information. Companies will be able to reinvent business processes, extending them directly to the persons in the field who deal directly with customers. Ultimately, companies and carriers could deploy wireless LANs to hotels and other public places, creating hot spots of high-speed connectivity for M-commerce. In the future, the ideal mobile device will be a single product suited for standard network access and services to handle tasks that extend the use of the device beyond its hardware-based limitations.

A U.K.-based consultancy's analyst predicts that 70 percent of current cellular users in developed countries may be using advanced data services by 2005, with the value of the cellular data market overall set to reach $80 billion, from a very low base in 1999. The takeoff of cellular data is attracting a host of new players to the mobile communications market, including Internet-based companies such as Netscape, Amazon, Excite, Microsoft, IBM, and Cisco. Media companies such as CNN, Reuters, and ITN are examples of earlybird providers. ^[18]

As for the United States, the number of people using cellular telephones for wireless data skyrocketed from 3 percent of the online population to 78 percent over the 12 months from January through December 2001. The main reason for the increase is that employers are starting to pay for these services, according to a survey released by New York-based Cap Gemini America and Corechange, Inc., a wireless portal provider based in Boston. Currently, 33 percent of the U.S. online population uses cellular phones for business purposes. Of that 33 percent, 11 percent (or 3 percent of the total online population) uses them for data applications such as e-mail and news, the companies say. By the end of 2001, 78 percent of the U.S. online population will be using cellular telephones for data. According to this survey of 1000 U.S. Internet users, which was conducted by Greenfield Online, Inc. on behalf of Cap Gemini, 47 percent of those who will begin using cellular telephones to access data in the year 2001 said they would do so because someone else, mainly their employer, would begin paying for it. "This was the most important reason for adoption of the new technology," said David Ridemar, head of Cap Gemini America's E-Business Unit. Of those who will start accessing data with their cell phones in 2001, 52 percent said they will use the functionality for a mix of e-mail, personal data, and business information, 24 percent will use it for e-mail and personal data, and 13 percent will use it for e-mail only. ^[19]

Jupiter Communications forecasts a jump in consumer-to-consumer auctions from $3 billion in 1999 sales to $15 billion in 2004. These numbers are significant because auctions are a natural match for wireless providers for the following reasons:

• Wireless auctions require much less bandwidth and data than a typical E-commerce Web site.

• The time-sensitivity of auctions makes it much easier to access over WAP-enabled phones or PDAs such as the Palm VII (compatible with eBay) or Research in Motion's 957 wireless handheld compatible with Bid.com.

Indeed, it is suggested by some analysts that cellular subscriber numbers will top 1 billion by 2004, a substantial number of them WAP-enabled. Clearly, giving mobile users the same mobile data connectivity that fixed network Internet users enjoy could more than double the potential global Internet market at a stroke.

The Gartner Group's Nigel Deighton maintains that, given current penetrations of mobile and Internet markets, the stage is set for a global boom in M-commerce that could largely ignore the PC in favor of mobile devices. He predicts further that some 30 to 50 percent of B2B E-commerce will be carried out via a mobile device by 2004. ^[20] Motorola, for example, estimates that by 2005 the number of wireless devices with Internet access will exceed the number of wired ones. These smart new telephones will not only give another boost to the sale of mobiles, but they will change the nature of the Internet economy, making personal computers far-less important, yet at the same time tempting many more people onto the information superhighway. ^[21]

I strongly believe that trade cannot be tied to wires. As so much research indicates, a major part of the workforce is heading toward location independence. The PC-based Internet has already redefined the nature of doing business, giving birth to popular E-commerce. However, to be truly location independent and to be "anytime, anywhere," the PC is not the choice for B2B and B2C M-commerce. Necessity is the mother of all invention. M-commerce is already becoming a necessity in this age of the digital economy. In conclusion, the world is betting on M-commerce, in a manner reminiscent of the 1999 United States bet on Internet commerce. We can safely predict many losers, and a few winners, from the worldwide run to mobile Internet services.

^[17]Murphy, D., The mobile economy becomes a reality, Telecommunications, 33 (11), 31–34, 1999.

^[18]Murphy, D., The mobile economy becomes a reality, Telecommunications, 33 (11), 31–34, 1999.

^[19]Trombly, M., Web access via cell phone to skyrocket this year available at http://www.cnn.com/2000/TECH/computing/04/18/data.cell.idg/index.html and http://www.cnn.com/2000/TECH/computing/01/19/verisign.secure.idg/index.html, 2000.

^[20]Murphy, D., The mobile economy becomes a reality, Telecommunications, 33 (11), 31–34, 1999.

^[21]Woolridge, A., Survey: telecommunication — in search of smart phones, Economist, October 1999, 353(8140), pp. 12–16.