Chapter 5: Mobile Electronic Commerce

CHAPTER FIVE
MOBILE ELECTRONIC COMMERCE

Contents
 Overview
 Wireless Industry
 Wireless communication platform
 Wireless WANS
 Facilitators of a wireless Environment
 Concerns for Mobile Enterprise

5.1 Overview of Mobile Electronic Commerce

Mobile commerce (m-commerce) refers to the use of wireless devices such as mobile phones for
informational or monetary transactions. Levels of product purchase by mobile phone have proved
very low in comparison with the Internet, even for standardized products such as books and CDs.
Mobile technologies are not new – it has been possible for many years to access the Internet for e-
mail using a laptop connected via a modem. However, the need for large devices directly connected
to the Internet was overcome with the development of personal digital assistants (PDAs) such as the
PocketPC or RIM Blackberry and mobile phones. These access the Internet using a wireless
connection.
The characteristics that mobile or wireless connections offer to their users are ubiquity (can be
accessed from anywhere), reachability (their users can be reached when not in their normal location)
and convenience (it is not necessary to have access to a power supply or fixed-line connection). In
addition to these obvious benefits, there are additional benefits that are less obvious: they provide
security – each user can be authenticated since each wireless device has a unique identification code;
their location can be used to tailor content; and they provide a degree of privacy compared with a
desktop PC – looking for jobs on a wireless device might be better than under the gaze of a boss. An
additional advantage is that of instant access or ‘always-on’; here there is no need to dial up a
wireless connection. The below figure provides a summary of the mobile or wireless Internet access
proposition. There are considerable advantages in comparison to PC-based Internet access, but it is
currently limited by the display limitations such as small screen size and limited graphics.
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Fig. Summary of mobile or wireless Internet access consumer proposition

Technology Convergence is an important phenomenon as digital marketers consider how they can
Evolve their propositions for consumers. As you know, today a mobile phone is not just a phone; it is
likely also a text messaging system, music playing system, e-mail reading platform, camera, personal
organizer, Internet access device and Global Positioning System (GPS). Of course, just because a
technology is possible does not mean it is widely used. So, for marketers, it is important to assess
new technologies and support them once they reach critical mass, or if there is a niche which can be
exploited. For example, many users now use phones or PDAs for accessing e-mails, so it is important
that marketers ensure their messages are received on these devices.

5.2. Wireless Industry

SMS messaging

In addition to offering voice calls and data transfer, mobile phones have increasingly been used for e-
mail and Short Message Service (SMS), commonly known as ‘texting’. SMS is, of course, a simple
form of e- mail that enables messages to be transferred between mobile phones.
Texting has proved useful for business in some niche applications. For example, banks now notify
customers when they approach an overdraft and provide weekly statements using SMS. Text has also
been used by consumer brands to market their products, particularly to a younger audience as the
case studies at text agency Flytxt (www.flytxt.com) and TextIt, the organization promoting text
messaging (www.text.it), show. Texting can also be used in supply chain management applications
for notifying managers of problems or deliveries.
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SMS applications

1. Location-based services. Text for the nearest pub, club, shop or taxi. In London you can now text
for the nearest available taxi and pay the congestion charge through texting once accounts are set
up via the web!
2. Sampling/trial. Nestlé used an opt-in SMS database to offer samples for a new chocolate bar to
consumers in its target group.

3. Sales promotions. Timed e-coupons can be sent out to encourage footfall in real and virtual stores.
Drinks brand WKD offered its consumers to ‘Peel Off and Win’ on its bottles. The competition
offered prizes of 3,000 football club shirts, mini footballs, 10,000 referee cards, and 1m exclusive
ringtones and logos designed by WKD. Half a million people played the game, a campaign
response rate of 3%. A 3,000-strong optin database of the company’s 18–24-year-old customer
base was created. The company plans to use this database to trial new WKD variety Silver.
4. Rewarding with offers for brand engagement. Valuable content on mobiles can be offered via
SMS, for example free ringtones, wallpaper, Java games or credits can be offered to consumers via
text.
5. Short codes. These are easy to remember 5-digit numbers combined with text that can be used by
advertisers or broadcasters for response.
6. Offering paid for WAP services and content. Any service such as a ringtone delivered by WAP can
be invoked from a text message. For example, Parker’s Car Guides now prints ad text ‘go parkers’
to 89080 (a short code) for quick access to the Parker’s WAP site which provides car prices on-
the-go, at £1 for 10 minutes.
7. Database building/direct response to ads/direct mail or on-pack. This is one of the most significant
applications. For example, Ford engaged its audience when promoting the Ford Ka by offering
consumers to text in a unique code printed on their postcard for entry into a prize draw.

5.3. Wireless communication platform

The Wireless Communications Platform is an innovative, practical and cost-efficient telemetry

solution for gathering and transmitting information using existing communication technologies and
infrastructures.

“Telemetry is the wireless transmission and reception of measured quantities for the purpose of
remotely monitoring environmental conditions or equipment parameters. The term is also used in
reference to the signals containing such data.”
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Telemetry is an automated communications process by which measurements are made and other data
collected at remote or inaccessible points and transmitted to receiving equipment for monitoring. The
word is derived from Greek roots: tele = remote and metron = measure. Systems that need external
instructions and data to operate require the counterpart of telemetry, tele-command.

Although the term commonly refers to wireless data transfer mechanisms (e.g., using radio,
ultrasonic, or infrared systems), it also encompasses data transferred over other media such as a
telephone or computer network, optical link or other wired communications like phase line carriers.
Many modern telemetry systems take advantage of the low cost and ubiquity of GSM networks by
using SMS to receive and transmit telemetry data.

A telemeter is a device used to remotely measure any quantity. It consists of a sensor, a transmission
path, and a display, recording, or control device. Telemeters are the physical devices used in
telemetry. Electronic devices are widely used in telemetry and can be wireless or hard-wired, analog
or digital. Other technologies are also possible, such as mechanical, hydraulic and optical.

5.4. Wireless WANS

Wireless WAN is a wide area network in which separate areas of coverage or cells are connected
wirelessly to provide service to a large geographic area.

A wireless wide area network (WWAN), is a form of wireless network. The larger size of a wide
area network compared to a local area network requires differences in technology. Wireless networks
of all sizes deliver data in the form of telephone calls, web pages, and streaming video.

A WWAN often differs from wireless local area network (WLAN) by using mobile
telecommunication cellular network technologies such as LTE, WiMAX (often called a wireless
metropolitan area network or WMAN), UMTS, CDMA2000, GSM, cellular digital packet data
(CDPD) and Mobitex to transfer data. It can also use Local Multipoint Distribution Service (LMDS)
or Wi-Fi to provide Internet access. These technologies are offered regionally, nationwide, or even
globally and are provided by a wireless service provider. WWAN connectivity allows a user with a
laptop and a WWAN card to surf the web, check email, or connect to a virtual private network
(VPN) from anywhere within the regional boundaries of cellular service. Various computers can
have integrated WWAN capabilities.

Since radio communications systems do not provide a physically secure connection path, WWANs
typically incorporate encryption and authentication methods to make them more secure.
Unfortunately some of the early GSM encryption techniques were flawed, and security experts have
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issued warnings that cellular communication, including WWAN, is no longer secure. UMTS (3G)
encryption was developed later and has yet to be broken.
Wireless WANS
Although the preceding architectures are specific to wireless LAN environments, employees that are
outside the coverage area are required to connect through wireless carriers that provide support for a
wireless wide area network (WAN) environment. There are several wireless WAN protocols used all
over the world.
Code Division Multiple Access (CDMA)

With CDMA, a large number of users are able to access wireless channels on demand. Used by most
digital mobile phone companies today, the performance is almost 8 to 10 times better than traditional
analog cell phone systems. The latest generation of this technology is called 3G and is much
anticipated by many mobile users.
Global System for Mobile (GSM)
The GSM wireless platform provides full voice and data support with worldwide roaming
capabilities. Included in the GSM family is the General Packet Radio Service (GPRS) platform for
delivering Internet content on mobile devices, and the Enhanced Data rates for GSM Evolution
(EDGE) and Third Generation GSM (3GSM) for delivering mobile multimedia.

Most wireless carriers base their offerings on the previously mentioned platforms, leveraging the
strengths of the protocol they decide to use. For example, services offered by Sprint PCS and
Verizon Wireless are based on CDMA, whereas AT&T Wireless and T-Mobile use GSM.

5.5. Facilitators of a wireless Environment

In order to facilitate a mobile e-commerce environment, participation of several partners is required,

namely:

 Independent hardware vendors (IHVs) Independent software vendors (ISVs) Mobile device
manufacturers

 Service providers (SPs) Wireless operators (or carriers)

Wireless Hardware

There are numerous devices that are wireless-enabled to facilitate an efficient mobile workforce.
Some of the top companies that provide these devices are:
Compaq: The makers of iPAQ handheld computers and notebook PCs. They are used in many
enterprise settings due to their versatility and high performance. They use Microsoft’s PocketPC
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platform as their operating system.

Kyocera: They specialize in mobile phones with PDA capabilities, using the Palm OS.
Palm: Currently the leading provider of PDAs; their operating system, called Palm OS, is a popular
platform for wireless application deployment.
Research In Motion (RIM): The makers of the increasingly popular Blackberry wireless devices
that allow mobile users to send and receive e-mail.
Symbol: The leading manufacturer of wireless devices and scanners for retail, utilizing the latest
technology in bar code scanning.
Wireless devices add value to the enterprise only when they connect to the IT infrastructure and are
actively supported by the administration. Access points, network cards, and other components
essential to the deployment of a wireless communications infrastructure are available from several
vendors, including: 3Com, Cisco, Fujitsu, HP, IBM, and Siemens
Note
With the wireless infrastructure in place, it is important to choose the right carrier to facilitate
high- quality communications.

Wireless Operators

Wireless operators are organizations that provide the hardware and communications infrastructure to
make wireless transmission possible in a wireless LAN and/or a wireless WAN environment. Most
of these provide basic wireless phone services and many of them now offer services to transmit data
in various forms. The top three wireless carriers worldwide are:
The top three international wireless operators

 Vodafone
 China Mobile
 NTT DoCoMo Inc.

Depending on the geographical scope of your organization, you will have to choose the right partner
who can provide the required regional and/or national coverage necessary for your e-commerce.

Wireless Software

The wireless software industry is still maturing; furthermore, although most of the players are niche
solution providers, very few actually provide substantial value to enterprise deployments. Ranging
from low footprint applications like mini-browsers or PDA utilities, to more sophisticated solutions
like inter device communications or global positioning systems, wireless software vendors are
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engaged in several innovative research and development initiatives. Companies such as Microsoft,
Sun, Palm, and others are active in this area.
When deploying a mobile e-commerce strategy, you have to consider the right combination of
wireless network architecture, platforms, infrastructure components, devices, and applications in
order to be successful.
Enterprise-wide view of the wireless infrastructure.

Even with the absence of ubiquitous standards, the current wireless infrastructure is stable enough to
support and deploy wireless applications developed for the mobile workforce. As wireless
technologies mature, the quality and availability of wireless software will also grow. An important
factor to consider is the need to secure and manage the enterprise infrastructure, while making all the
necessary assets available to your mobile workforce.

5.6. Concerns for Mobile Enterprise

The widespread adoption of mobile devices in the enterprise has unleashed productivity gains and
cost savings that couldn't have been envisioned only a few years ago. However, these devices have
also generated an array of new concerns, as well as challenges for business and IT executives. A
recently released study, the "Mobile Content Security and Productivity" report, by AIIM (a global
community of information professionals that provides education, research and certification) in
conjunction with Accellion (a provider of enterprise-class mobility solutions), indicates that many
organizations lack confidence in the mobile protection policies and protections they currently have in
place. These concerns revolve around technical issues as well as practical and political issues,
including the bring-your-own- device (BYOD) movement. "How employees access corporate
information is changing, and organizations need to respond to these changes by implementing new
mobile policies and processes, or risk playing security catch-up with their employees," noted Paula
Skokowski, chief marketing officer of Accellion.