The mobile phone industry has experienced an explosive growth in recent years. The emerging markets such as China, India, and Brazil contribute this growth. In China, the number of mobile subscribers has already surpassed the number of fixed landline phone subscribers. In Korea and Japan, there is an explosion of mobile and wireless services. The United States are joining too and there were 207.9 million subscribers in 2005 (CTIA, 2006). Mobile e-commerce (m-commerce) makes business mobility a reality; mobile users could access the Internet at any time, from anywhere with handheld devices or laptop. A 3G enabled smart phone enables you to access a wide range of services anywhere and anytime. For example, you can send and receive e-mail, make cinema and restaurant reservations and pay for them, check real train time, look at digital maps, download music and games, and also browse the Internet. Mobile and wireless services are ranging from mobile communication networks to wireless local area networks. The service provided by mobile communication systems has achieved huge success as mobile and wireless communication technologies are converging at fast speed. We will study mobile and wireless communication in relation to mobile phones. Hence, m-commerce is defined as electronic commerce carried out in handheld devices such as smart phone through mobile and wireless communication network.
E-commerce was once characterized by e-marketplaces, online auction systems that act as the intermediary between buyers and sellers. Now it is evolving toward social network in which users take the control on the contents. Social networks such as YouTube (http://www.youtube.com) enable participants to share life experiences by posting video clips taken by mobile phones especially. The integration creates rich user-generated contents. At the same time, m-commerce also undergoes the evolution too. Many new business models have been established around the use of mobile devices. Mobile devices have the characteristics of portability, low cost, more personalization, GPS (global positioning system), voice etc. The new business models include micro payment and mobile payment, content distribution services, business services, and personal multimedia entertainment center (see Figure 1). Because of their existing customer base, technical expertise, and familiarity with billing, mobile telephone operators are the natural candidates for the provision of mobile and micro payment services. Micro payment involves small purchases such as vending and other items. In other words, the mobile phone is used as an ATM card or debit card. Consumers can pay for purchases at convenience stores or buy train tickets using their mobile phones.
Content distribution services are concerned with real time information, notification (e.g., bank overdraft), and using positioning systems for intelligent distribution of personalized information by location (e.g., selective advertising of locally available services and entertainment). Real-time information such as news, traffic reports, stock prices, and weather forecasts can be distributed to mobile phones via the Internet. The information is personalized to the user’s interests. By using a positioning system, users can retrieve local information such as restaurants, traffic reports, and shopping information. Content distribution services with a greater degree of personalization and localization can be effectively provided through a mobile portal. Localization means to supply information relevant to the current location of the user. Users profiles such as past behavior, situation, and location should be taken into account for personalization and localized service provision. Notification can be sent to the mobile device too. Mobile network operators (MNOs) have a number of advantages over the other portal players (Tsalgatidou & Veijalainen, 2000). First, they have an existing customer relationship and can identify the location of the subscriber. Second, they have a billing relationship with the customer while the traditional portal does not. MNOs can act as a trusted third party and play a dominant role in m-commerce applications.
Key Terms in this Chapter
The Third Generation (3G): It will bring wireless transmission speeds up to 2Mbps, which permits high-quality wireless audio and video. It comprises three primary standards: W-CDMA (wide-band code division multiple access), CDMA2000, and TD-CDMA (time division CDMA).
The WAP: A standard for providing cellular phones, pagers, and other handheld devices with secure access to e-mail and text-based Web pages.
Wi-Fi (Wireless Fidelity): It is a popular term for 802.11b, a wireless local area network (WLAN) specified by the Institute of Electrical and Electronic Engineers (IEEE) and is based on the Ethernet protocol and CSMA/CA (carrier sense multiple access with collision avoidance) for path sharing. Wi-Fi supports a range of about 150 feet and data rates up to 11mbps.
Wireless Application Protocol (WAP): It is an open, global specification that empowers mobile users with wireless devices to easily access and interact with information and services instantly.
3.5G: It is based on a technology called, HSDPA (high-speed downlink packet access). It will be upwardly compatible with 3G W-CDMA systems, but will enable more than 10X the peak data rate and more than 6X the capacity of initial 3G systems.
WiMAX (Worldwide Interoperability for Microwave Access): It is called 802.16 in industry standard, a wireless broadband connection in wide area network(WAN). It offers fast wireless data communications over distance up to about 30 miles.
Short: Message Service (SMS): It has grown very rapidly and is very popular in Europe. SMS messages are two-way alphanumeric paging messages up to 160 characters that can be sent to and from mobile phones
Global System for Mobile Communications (GSM): It is a world standard for digital cellular communications using narrowband TDMA (time division multiple access).It is the standard most commonly used in Europe and Asia, but not in the United States.