June 11, 2001, 10:23 AM — The next major shift in the use of IT will obviously be toward wireless and mobile commerce. It will happen in fits and starts, with the usual hype, chaos and clutter, disappointments and brilliant innovations -- just like with e-commerce. In many ways, m-commerce is the continuation of e-commerce with the Palm handheld, wireless laptops and a new generation of Web-enabled digital phones already on the market. Their effectiveness and range of applications today is limited by a lack of bandwidth, but that bottleneck is being removed, albeit in a piecemeal and fragmented way.
In one key regard, though, m-commerce is very different from e-commerce. E-commerce has been paced by U.S. technology and business innovation, particularly in the business-to-business market; there are approximately 20 firms selling US$1 billion to $20 billion worth of goods over the Internet -- yet none are outside the U.S.
But in wireless and m-commerce, the U.S. is a laggard. This has substantial implications for IT organizations. They largely don't know what's going on elsewhere and risk getting left behind in exploiting m-commerce. The fragmentation, unreliability, cost and poor quality of U.S. cell phone services, as well as the equally fragmented rollout of broadband services like Digital Subscriber Line, have all resulted in close to zero interest among consumers in wireless Internet tools, according to surveys. Early this year, Consumer Reports said that satisfaction levels with mobile phones were among the lowest in any of its studies, below that for lawyers.
Meanwhile, the rest of the world is moving fast, and IT developers in this country must play the role of followers in the m-commerce arena. Here are a few questions (followed by the answers) that can help you calibrate your knowledge:
1. Which company is the largest provider of mobile phone services?
2. What is GPRS?
3. What is WAP?
4. Which country has close to 100 percent mobile phone coverage among its adults and is the world leader in m-commerce applications?
5. What is DoCoMo?
6. What is SMS?
7. Which company has the largest share -- 35 percent -- of the world mobile handset market?
These aren't trick questions; the answers appear in many articles in the daily press. They are as follows:
1. The U.K.'s Vodafone Group PLC is the largest mobile company in the world, with a well-established strategy of massive acquisitions worldwide.
2. General Packet Radio Service (GPRS) is the 2.5G bit/sec. broadband wireless capability that fills the gap between first-generation digital phones and the massive, planned ? and much-delayed ? third-generation wireless services.
3. Wireless Application Protocol (WAP) is a specification being developed in a European-led effort to bring the wireless Web to mobile phones and personal digital assistants. WAP has been a major disappointment so far, but the lessons for designers have been substantial. Trying to shrink HTML pages onto a phone display with deadly slow wireless transmission speeds doesn't work.
4. Finland has set the pace for m-commerce with a flood of applications that are profitable and that show the extent to which there is real demand, given a solid wireless technology infrastructure. Many Finnish households and small businesses no longer bother with wired phones.
5. NTT DoCoMo Inc. is the world's most profitable and fastest-growing mobile Web and messaging service and also shows the proven demand for wireless messaging everywhere.
6. Simple Messaging System (SMS) is the foundation of the first generation of consumer m-commerce applications. It's almost nonexistent in the U.S., but in Europe, it's everywhere.
7. Nokia Corp. has 35 percent of the handset market; Motorola Inc. has just 13 percent.
M-commerce is international, and the more that IT professionals look beyond the U.S., the more they'll be able to accelerate their companies' moves into the next innovation space of online business.
Peter Keen's new book, co-authored with Ron Macintosh, The Freedom Economy: Gaining the M-commerce Edge in the Era of the Wireless Internet, is being published this month by McGraw-Hill. Contact him at peter@peterkeen.com.
