Since the 1990s, a surge in the popularity and usage of e-commerce has led to the recent emergence of conducting business transactions using handheld mobile devices connected by wireless networks (Andrew, Valacich, & Jessup, 2003). Known as mobile commerce, m-commerce allows for anytime and anywhere commercial transactions. M-commerce is an upcoming technology whereby commercial transactions are made through handheld devices, such as mobile phones and personal digital assistants (PDA), which are connected by wireless networks. The ability to conduct business anytime and anywhere through mobile commerce will remove the space and time constraints on an individual for conducting business. Different kinds of services have since emerged for conducting m-commerce, such as location-based services (LBS) (e.g., mobile advertising), pervasive computing, and mobile gaming. These services allow for conducting not only commerce but also business activities using mobile devices. Mobile business (mbusiness) allows for mainly two kinds of services, namely, push-based and pull-based. Push-based services are initiated by the vendor while pull-based services are initiated by the customer. We will discuss these services in m-business together with their advantages and disadvantages.
Location-based services are essentially push-based services that generate commercial activity by using geographic location information of the mobile devices, along with information about services and products available in physical proximity (Matthew, Sarker, & Varshney, 2004). The key component of LBS is location. Through location determination technologies (LDTs), the location of mobile device users can be detected via terrestrial or satellite-based technologies, with the global positioning system (GPS) being the most famous LDT.
LBS comprises of various services such as providing travel directions, instant information, traffic alerts, and so forth. Consumer services and mobile advertisements are examples of mobile services that link buyer and seller. Consumer services, a kind of customer-to-business (C2B) pull service, deliver products or shop-related information upon request. Buyers can obtain information from shops in a shopping mall based on products’ requirements on the buyer’s shopping list. Mobile advertising uses the business-to-customer (B2C) push method whereby advertisements which may contain special events information, discount vouchers, and so forth which are not requested by users will be sent to them when they are within a certain physical proximity from the store. For instance, when a customer is within the vicinity of Swensen’s, a 20% discount Swensen’s short message is sent to the customer’s mobile device. The customer can then use the discount message sent upon entering Swensen’s for a meal.
LBS can impact the purchasing behavior of consumers and the operations and business model of commercial businesses. In terms of value proposition, companies that involve in LBS provide not only elements of convenience and speed for up-to-date information, but are also able to achieve cost-savings and price comparisons between products. For example, instead of looking for a computer to search for the information online or to enquire from numerous friends, all one needs to do is to use LBS consumer services for desired information. An updated, hassle-free, and faster reply can thus be obtained.
The market space of companies can also be further expanded, promoting products or services to both intended and unintended consumers. As advertisements and promotions reach out to unintended consumers via LBS, the possibility of increased sales is higher which in turn generates more revenue. For example, a prospective customer may receive a promotional advertisement sent by, say, Marks and Spencer using LBS. Out of curiosity, the customer may decide to visit the Marks and Spencer store and conduct purchases. In this way, Marks and Spencer obtains extra revenue.
Key Terms in this Chapter
MMORPG: Massive multiplayer role-playing games. A genre of online computer role-playing games in which a large number of players interact with one another in a virtual world.
SMS: Short message service. A service available on most digital mobile devices and desktop computers that permits the sending of short messages between mobile phones, other handheld devices, and even landline telephone.
GPS: The global positioning system (GPS) is a satellite-based navigation system. Originally intended for military applications, it was made available for civilian use in 1980s. It works round the clock, in any weather conditions, anywhere in the world. There are no subscription fees or setup charges to use GPS.
LDT: Location determination technology refers to the technology used for location determination of a device in an access network. It varies between different types of network. The information obtained from the LDT is combined with the location information server (usually extracted from a database) to determine a final location.
Pervasive Computing: Pervasive computing or ubiquitous computing, as the name indicates, refers to the trend toward increasingly connected computing devices in the environment. The devices need not be computers, but very tiny (even invisible) and either mobile or embedded in almost any type of object, including cares, clothing, and appliances. The pervasive computing devices communicate through increasingly interconnected networks.
WAP: Wireless application protocol (WAP) is an open international standard used to enable access to Internet from mobile phone or PDA. A WAP browser provides all the basic services as a computer-based Web browser, but is simplified to operated within the restrictions of a mobile phone. It has gained popularity in recent years and is used for the majority of the world’s mobile Internet sites or WAP sites. However, it is being challenged to extinction by the iMode platform, which is much more flexible, fast, and user friendly.