Mobile Commerce

1
Mobile Commerce

• Prof. Euiho Suh
• 2004. 10. 18

POSMIS
2
Contents

• Definition and differences of M-commerce
• Classes of M-commerce applications
• Value Chain
• Terminology and Standards
• Attribute of M-commerce
• The driver of M-commerce
• Mobile Computing Infrastructure
• Wireless Standards and Security
• Applications finance, shopping
• Location-based Commerce

3
Definition of Mobile Commerce

• Any transaction conducted over a mobile
  telecommunications network.
• It represents a subset of all e-commerce
  transactions
• both in business-to-consumer and the
  business-to-business area

4
Differences between M- and E- commerce

• A permanent factor that makes difference between
  M- and the rest of the E- commerce is the
  possibility of the user to engage anywhere and
  anytime in M-commerce transactions for some this
  is the crucial difference
• The main functional distinction between the
  E-commerce in general and M-commerce are dynamic
  Location Based Services (LBS) that use the actual
  location of the terminal on earth in one way or
  the other to perform the transaction (cf.
  ordering taxi in a foreign city based on the
  positioning of the terminal and the taxi)

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Differences between M- and E- commerce (Cont.)

• Further difference are the properties of the
  truly portable terminals the simple UI
  facilities, slower processor, and smaller memory
  resources, as well as tiny energy reserves, as
  compared to PCs or laptops
• A fourth main difference is the relatively small
  wireless link transmission capacity offered to
  the terminals although the capacity is
  increasing with every network generation (10
  kbps, 100 kbps, 1 Mbps..), so is the capacity of
  the fixed networks thus the gap will exist also
  in the future

6
Classes of M-Commerce Applications
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Classes of M-Commerce Applications (Cont.)
M Commerce Applications
WASP
Games
Job Dispatch
Music
CRM
Advertising
Video
Supply chain Integration
Auctions
Telemetry
Telematics
Healthcare
Shopping
Information Provisioning
Broking
M-payment
Ticketing
Reservations
E-salary
Banking
E-bill
Information Management
Security
SMS
SMS Toolkit
WAP
GPRS
EDGE
UMTS
1998
1999
2000
2001
2002
2003
2004
SMS
IM
Chat
E - mail
PIM
UIM
Customer care
M Commerce Enabling Applications
Source Durlacher, Veba
8
Mobile Commerce Value Chain
Source The mobile commerce value chain
analysis and future developments, Stuart J.
Barnes, International Journal of
Information Management 22 (2002) 91108
9
M-Commerce Terminology

• Generations
• 1G 1979-1992 wireless technology
• 2G current wireless technology mainly
  accommodates text
• 2.5G interim technology accommodates graphics
• 3G 3rd generation technology (2001-2005)
  supports rich media (video clips)
• 4G will provide faster multimedia display
  (2006-2010)

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Terminology and Standards

• GPS Satellite-based Global Positioning System
• PDA Personal Digital Assistanthandheld
• 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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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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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

13
Characteristics of M-Commerce
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The Drivers

• Widespread availability of devices
• No need for a PC
• Handset culture
• Vendors push

• Declining prices
• Improvement of bandwidth
• Explosion of EC in general

15
Mobile Computing Infrastructure

• Hardware

• Screenphonesa telephone equipped with color
  screen, keyboard, e-mail, and Internet
  capabilities
• E-mail handhelds
• Wirelinedconnected by wires to a network

• Cellular (mobile) phones
• Attachable keyboard
• PDAs
• Interactive pagers
• Other devices
• Notebooks
• Handhelds
• Smartpads

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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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Mobile Computing Infrastructure (cont.)

• Software

• Microbrowser
• Mobile client operating system (OS)
• Bluetootha 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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Mobile Computing Infrastructure (cont.)

• Networks and access
• Wireless transmission media
• Microwave
• Satellites
• Radio
• Infrared
• Cellular radio technology
• Wireless systems

19
Wireless Standards and Security

• M-commerce supported by
• Standards
• Security
• Voice systems

20
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 802.11b (Wi-Fi)
• Wideband CDMA

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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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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)

23
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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Applications mobile financial

• 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
• Micropaymentselectronic payments for
  small-purchase amounts (generally less than 10)

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Applications mobile financial (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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Applications mobile financial (cont.)

• Swedish Postal Bank
• Dagens Industri
• Citibank
• Japanese banks

• Hoovers wireless (hoover.com)
• ASB Bank (New Zealand)
• Bostons Faneuil Hall Marketplace

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Bill Payments by Cell Phone
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Applications 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

29
Applications Shopping from Wireless Devices
(Cont.)
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Location-Based Commerce

• Location-based commerce (L-commerce)
• e-commerce applications provided to customers
  based on a users specific location
• Location-based technologies
• Global positioning systemsa 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 handsetsstand-alone units for tracking
  applications

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Location-Based Services Involving Maps
32
GPS System
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Applications Telematics and Telemetry

• Telematicsintegration of computers and wireless
  communications to improve information flow using
  the principles of telemetry
• GM OnStar systemcellular 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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Applications Telematics and Telemetry (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
• Manufacturers 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

35
Barriers to Location-Based Commerce

• The accuracy of some of the location technologies
• The cost-benefit justification
• M-spam
• The bandwidth of GSM networks

36
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

37
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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Technical Limitations (cont.)

• WAP limitations
• Speedin 2002 connections to WAP sites are still
  too slow
• Costfees for mobile phone users are still too
  high
• Accessibilityas of spring 2002, fewer than
  50,000 WAP-accessible sites worldwide (must be
  written in WML)

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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
  filedpublic is advised to adopt a precautionary
  approach in using mobile phones (earphone device)