Pros and cons of Mobile Commerce

written by: John Davidson; article published: year 2006, month 08;



In: Categories » Business » Marketing » Pros and cons of Mobile Commerce

Mobile commerce is defined as "content delivery (notification and reporting) and transactions (purchasing and data entry) on mobile devices". Mobile users can compute, engage in commerce and access information from anywhere, any time with mobile technologies. Mobile technology supported information exchange and transactions should take place in a convenient environment and setting. The users would be individuals or businesses and hence, mobile commerce enables business-to-business (B2B) transactions as well as business-to-consumers (B2C) transactions.
Referring to the need to replace the term "electronic commerce" with the term "electronic business", as the former has always been accused of being limited to exchanges of monetary values only and with close trading partners only: this does not reflect the multi-faceted value-perspectives (monetary as well as non-monetary) that characterise the emerging new technological field. Therefore, the term "business" is envisioned here to be more encompassing and would achieve such an objective and hence, is used in this research interchangeably with "mobile commerce" to refer to mobile business (MoB) only.

Mobile business involves different stakeholders in the mobile industry such as mobile hardware manufacturers, mobile applications and portals developers, middleware developers and integrators, wireless network providers and carriers, intermediaries, and finally, services and content providers. In view of the different technologies that provide mobile commerce functionality, the following taxonomy depicts five main categories:

  • Interactive or two-way pagers, which exchange short SMS (Short Message Systems) messages.
  • Mobile phones that provide access to the web through the Wireless Application Protocol (WAP's WML Vs. DoCoMo's i-mode) or to SMS services.
  • Personal Digital Assistants (PDA) with wireless modem (e.g., Palm).
  • Wireless Internet access on laptop computers using IEEE 802.11a,b radio frequencies (CSMA/CA not CD) standards.
  • Wireless network devices such as those offered by Cisco, Symbol (e.g., wireless barcode reader/transmitters), and Proxim, using, e.g., infrared and radio frequencies and other wireless technologies including satellite, cellular and microwave communications.

There is increased hype among researchers and professionals about the recent emergence of technologies aiming at delivering remote or wireless commercial applications, mainly driven by the earlier hype about text-based mobile applications driven mostly by the wireless application protocol (WAP). The strength of this hype for mobile commerce among researchers and professionals is that the technology is promising to provide rich, personalised, localised, and real-time content on feasible handheld mobile technologies to users (usually very busy) anywhere, anytime, thus providing more convenience to traditional electronic commerce (e-business) buyers and suppliers existing in the wired marketplace. Let's not forget that mobile business is the result of this wired marketplace and pervasive computing, where mobile computing and communication capabilities are envisioned to be embedded in everyday activities of the different users.
Despite the hype about MoB among leading operators in the U.S., where they expect the number of MoB subscribers to increase rapidly in the near future and the profit margins of wireless and voice communications to plummet drastically, these analyses are based on the wired subscriber-base. This perception among telecommunication carriers and operators that if the on-line consumer stake increases over the Internet this will lead to the increase in the mobile consumer stake that uses MoB-enabling technologies is quite misleading. Such positivism among carriers and operators about MoB success is plagued by the following major impediments:

  • Bit rate: 9.6 Kbps: speed so far is the major barrier for the wide success of MoB and this relates directly to the existing operator/carrier (O/C) telecommunication infrastructure that exists in the different countries. Rather than providing at least regular 33 or 56 Kbps connection (as is the case with Internet subscribers) to domestic mobile Internet subscribers in order to provide full navigational and multimedia capabilities, O/C endeavours to provide a stripped-down version of some of the Internet content to cope with existing speed/bandwidth limitations in the wireless technology, and this represents a deficient process.
  • Subscribers' interests and needs: despite the push from O/C for contents over MoB, recent statistics indicate that: (a) 82% of mobile consumers have shown no interest in mobile data services - Then, how about selling products and services over mobile technologies!; (b) Small processing power and small mobile browsing screens are very hard to navigate, which makes the mobile browsing experience un-enjoyable to subscribers.
  • Cost: ridiculous-costing schemes enforced by O/C to charge high profit margins - Driven mostly by fast Mobile Internet return-on-investments plans, and this in turn was encouraged by the lack of competition in the field (earlier players make most of the profits and dictate the roles of the game). However, with the introduction of more advanced and optimised technologies into the MoB arena (bandwidth, processing, etc.), increased subscribers base, and more competitors entering into the MoB field it is expected that prices will ultimately be drawn down

Thus far, the results pertaining to the wide diffusion of MoB are not satisfactory and above all the comparison between Internet and mobile users is not a straightforward process, and the experiences of each medium differ fundamentally from the experience of the other! This necessitates a closer look at MoB in general and at subscribers and their needs alongside the mobile technology specifically in use.
Therefore, this article attempts to introduce and investigate the main issues influencing MoB success at the global level. The purpose of this article is to identify the main contexts and factors influencing MoB success and discuss ways where MoB could be progressed forward. Drawing that broader picture about MoB success or failure is very important. Building that holistic understanding about main impending issues pertaining to MoB and addressing those issues is therefore very important in order for MoB to succeed in the different countries. Thus, tackling or focusing on specific issues with greater detail is not an objective in the current article and it is left for future research to expand on certain issues highlighted in this article. The article outcomes could assist researchers, professionals and policymakers in understanding the main impending issues behind MoB success as an emerging, revolutionary technology in a broader sense. Further, the current article represents a great opportunity for the different stakeholders in the different countries to expand on some of the main issues in this article that are more amenable to their countries and contexts. In the following, each section attempts to address one unique aspect pertaining to MoB in greater detail.

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