POSTECH

Mobile Commerce

Prof. Euiho Suh2004. 10. 18

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Contents

1. Definition and differences of M-commerce

2. Classes of M-commerce applications

3. Value Chain

4. Terminology and Standards

5. Attribute of M-commerce

6. The driver of M-commerce

7. Mobile Computing Infrastructure

8. Wireless Standards and Security

9. Applications : finance, shopping

10. Location-based Commerce

11. Limitations of M-commerce

12. Technical Limitation

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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

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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 PC:s 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

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Classes of M-Commerce Applications

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Source: Durlacher, Veba

Job Dispatch

Telemetry

Information Provisioning

Banking Ticketing

Broking

Telematics

CRM

1998 1999 2000 2001 2002 2003 2004

Advertising

WASP

Auctions

Shopping

Music

Supply chainIntegration

Healthcare

Games

Video

SMSSMS Toolkit

WAP GPRS EDGE UMTS

SMS Chat

E - mail

IM

PIM

Customer care UIM

M – Commerce Applications

M – CommerceEnabling Applications

M-payment

Reservations E-bill E-salary

InformationManagementSecurity

Classes of M-Commerce Applications (Cont.)

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Mobile Commerce Value Chain

Source : The mobile commerce value chain: analysis and future developments, Stuart J. Barnes, International Journal of Information Management 22 (2002) 91–108

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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 SystemPDA : Personal Digital Assistant—handheld wireless computerSMS : Short Message ServiceEMS : Enhanced Messaging ServiceMMS : Multimedia Messaging ServiceWAP : Wireless Application ProtocolSmartphones : 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

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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

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Mobile Computing Infrastructure

Cellular (mobile) phones

Attachable keyboard

PDAs Interactive pagers Other devices

Notebooks Handhelds Smartpads

Screenphones—a telephone equipped with color screen, keyboard, e-mail, and Internet capabilities

E-mail handhelds Wirelined—connected

by wires to a network

Hardware

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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.)

Microbrowser Mobile client operating system (OS) Bluetooth—a 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

Software

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Mobile Computing Infrastructure (cont.)

Networks and access Wireless transmission media

Microwave Satellites Radio Infrared Cellular radio technology

Wireless systems

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Wireless Standards and Security

M-commerce supported by Standards Security Voice systems

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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

VirusesSmart 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)

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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 portable2 ½ times faster than typingFewer 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

Micropayments—electronic payments for small-purchase amounts (generally less than $10)

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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

Applications : mobile financial (cont.)

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Applications : mobile financial (cont.)

Swedish Postal Bank

Dagens Industri Citibank Japanese banks

Hoover’s wireless (hoover.com)

ASB Bank (New Zealand)

Boston’s 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

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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

user’s specific location

Location-based technologies Global positioning systems—a 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 handsets—stand-alone units for tracking applications

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Location-Based Services Involving Maps

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GPS System

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Applications : Telematics and Telemetry

Telematics—integration of computers and wireless communications to improve information flow using the principles of telemetry GM OnStar system—cellular 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 Manufacturer’s 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

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Barriers to Location-Based Commerce

The accuracy of some of the location technologies

The cost-benefit justification

M-spam

The bandwidth of GSM networks

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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

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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 Speed—in 2002 connections to WAP sites are

still too slow Cost—fees for mobile phone users are still too

high Accessibility—as 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 filed—public is advised to adopt a precautionary approach in using mobile phones (earphone device)