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    Cyberposium 2002 -- Does Mobile Commerce Have Legs?

     
    2/25/2002
    The technology of mobile commerce is tantalizingly close—but do customers really want to buy items with a click of their PDA? And if so, what will they buy? What about privacy issues? Experts at Cyberposium 2002 surveyed the landscape of so-called m-commerce.
    by Julia Hanna, HBS Bulletin

    Does Mobile Commerce Have Legs?

    While utopian dreams of a wireless society remain largely unfulfilled, companies continue to anticipate—and invest in—so-called mobile commerce, or m-commerce. In a discussion of investment opportunities, privacy issues, and next-generation technology, a panel of industry executives examined the state of the market today.

    "M-commerce is more than grand visions of location-based services," said Omar Javaid, chairman, co-founder, and CTO of Mobilocity. "Real, measurable returns come from popular but un-sexy applications like e-mail," he said, citing the popularity of BlackBerry wireless email devices.

    "With 130 million cell phones in market, there's potential for phenomenal growth in the consumer market," added Rick Hutton, senior director of the multimedia and mobile group at Terra Lycos. "People want to buy things, but the user interface has to work well. People need dirt-simple applications."

    Quotation
    Right now we have a halfway service —I can find out where and when a movie is playing but I can't buy a ticket to see it.
    — Joseph Ferra, Fidelity eBusiness
    Quotation
    "The enterprise market seems to hold the greatest near-term opportunities," countered Stephen Diorio, founder and president of IMT Strategies. "I'm skeptical about cell phones at this point. Concentrating on dirt-simple applications is important, but I don't see a lot of calories going to that effort—they're mostly going to security and infrastructure."

    At Palm Inc., the focus is on the "mobile workforce," said Andrew Breen, senior business development manager. "Eighty percent of our customers use wireless for business purposes such as stock trading and e-mail."

    Good, but not great
    It's an imperfect but evolving technology, noted Joseph Ferra, chief wireless officer at Fidelity eBusiness. "Right now we have a halfway service—I can find out where and when a movie is playing but I can't buy a ticket to see it." The growth of m-commerce is moving from delivering information to conducting transactions, Ferra said, with the next phase focusing on customer relationship management.

    "I don't want to limit the discussion to cell phones and PDAs," put in Javaid, making a case for digital satellite radio. Leveraging the power of wireless technology requires companies to understand the medium and channel it properly, he continued, and digital satellite radio offers the opportunity to extend relationships with customers and generate revenue through advertising. "This is a growing market for us—it suggests a whole new set of alliances."

    Whatever the medium, find a niche, advised Diorio. "The people who make money in this market will be focusing on niche audiences of five to ten million people," he said, naming executives, teenagers, and products for cars as three prime targets.

    What are the obstacles to growth? Jason Catlett, founder and president of Junkbusters Corp., a privacy advocacy firm, suggested that playing fast and loose with consumer rights could bring m-commerce development to a screeching halt.

    "It involves issues of who gets what data, and how," Catlett said. "Suppose you get the weather report on a mobile browser. The carrier knows where you are—do they share that information with an advertiser?"

    Privacy issues are important, Hutton agreed, but they won't hold back the industry. "Identity theft is on the rise, but that doesn't keep people from signing credit cards," he remarked. Regulatory systems and laws will be developed to protect consumer rights.

    Special delivery
    So where is m-commerce heading? Three areas of focus offer the biggest opportunities for next-generation technologies, said Breen: communications productivity, applications for CRM and ERP, and service applications for field reps and others who work outside the office. "However," Breen added, "there needs to be an open platform that will make it easy to integrate disparate mobile devices."

    Creating a flexible platform for the delivery of services is the task at hand, agreed Diorio. "Work on delivery systems first," he said.

    At Fidelity eBusiness, Ferra said, the focus is on forming strategic partnerships and creating a product that is easy to use, rich in content, and highly personalized. "M-commerce is the wave of the future in financial services," he continued. "We know it's going to have to evolve."

    "This is not a revolution, it's an evolution," agreed Breen.

    In other words, don't expect advances in m-commerce to occur overnight. Like all evolutionary processes, change will come gradually, through experimentation and adaptation.

    Julia Hanna is an associate editor for HBS Bulletin.

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