Sharif University of Tech Kissing the Cell Phone! M-Commerce & it’s Business Models By: Ali Chekah Narges Aghabeigi Mohammad Hossein Eftekhari 15/اوت/19

Sharif University of Tech

Kissing the Cell Phone!

M-Commerce & it’s Business Models

By:Ali Chekah

Narges AghabeigiMohammad Hossein Eftekhari

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content• Definition• Attributes and Benefits• Drivers• Limitations• Differences in the User Experience• Mobile commerce from the Customer‘s point of view• Mobile commerce from the Provider‘s point of view• Business models• New Possible Roles• Revenue Models for Content Providers

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Definition

Use of a mobile device to:

Purchase goods

Purchase services

Purchase content

Pay via cell phone post/pre-paid account balance or via a credit/debit card

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Attributes and benefits

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drivers

• Exponential growth of consumer interest and adoption of the Internet and e-commerce.

• Tremendous growth in mobile telephony; however, voice has become a commodity and will no longer fuel revenue growth for operators.

• The evolution of the handheld devices incorporating WAP and now GPRS.

• Cost of entry into mobile e-commerce is low for most entrants.

• Cell phones is absolutely a personal device

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Limitations• Usability Problem

• small size of mobile devices (screens and size, keyboards, etc)• limited storage capacity of devices• hard to browse sites• short battery lifetime

• Technical Limitations• lack of a standardized security protocol• insufficient bandwidth• 3G licenses• transmission and power consumption limitations

– poor reception in tunnels and certain buildings– multipath interference, weather, and terrain problems and distance-limited

connections• WAP Limitations

• Speed• Cost• Accessibility

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Differences in the User Experience

• Less browsing and more searching• Fewer site visits• One company to own entire experience• Focus is on information rather than

transactions

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Mobile commerce from the Customer‘s point of view

• The customer wants to access information, goods and services any time and in any place on his mobile device.

• He can use his mobile device to purchase tickets for events or public transport, pay for parking, download content and even order books and CDs.

• He should be offered appropriate payment methods. They can range from secure mobile micropayment to service subscriptions.

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Mobile commerce from the Provider‘s point of view

• The future development of the mobile telecommunication sector is heading more and more towards value-added services. Analysts forecast that soon half of mobile operators‘ revenue will be earned through mobile commerce.

• Consequently operators as well as third party providers will focus on value-added-services. To enable mobile services, providers with expertise on different sectors will have to cooperate.

• Innovative service scenarios will be needed that meet the customer‘s expectations and business models that satisfy all partners involved.

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Business Models for m-Commerce

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content• Definition• Attributes and Benefits• Drivers• Limitations• Differences in the User Experience• Mobile commerce from the Customer‘s point of view• Mobile commerce from the Provider‘s point of view

• Business models– Importance of appropriate Business Model– Development Process– Relevant factors for Business Modeling– An Example of Business Model

• New Possible Roles• Revenue Models for Content Providers

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Business Models for m-Commerce Importance of appropriate Business Models

•Even the most brilliant service will not be commercially successful for the provider if the chosen business model is not appropriate for the service.

•Therefore the presentation put an emphasis on defining criteria for the evaluation of generic m-commerce business models and choosing the right business models for the services mentioned before.

•The approach followed consisted of considering a business model in terms of actors, roles and business relations such as information, product, service and revenue flows.

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Business Models for m-Commerce Development Process for new Products and

Services

No Yes

NoYes

Market Pull

TechnologyPush

Business modellingConcept definition ofthe product/service

Business analysis

Marketing plan

Definition and use of market analysis

Business plan

StopSustainableok?

Sustainableok?

Market analysis(interest, sustainability,

competition, competitive advantage)

Service developmentand investment

analysis

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Business Models for m-Commerce Relevant factors for business modelling

• The following core issues for business models were identified and defined:

• the concept for a new mobile commerce service• the positioning of the mobile operator taking into account its

strategic advantages• the target market, in terms of market segment and corresponding

potential• the relationship with other strategic business partners.

• We will start by looking at the position business modelling takes in the development process for new products and services.

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An example of a Business Model for m-Commerce : Mobile Gambling - Usage scenario

•Betting is always time sensitive, people always want to bet just before the match or race begins. Therefore the application has to allow quick and easy usage.

•Users could send their bets and check their status using text-based technologies like SMS or WAP.

•The application could be downloaded from the provider’s server to the user’s mobile or run from where it is hosted.

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An example of a Business Model for m-Commerce :Mobile Gambling - Payment method

•The timing of payment is important because for a bet to be valid the player should make a commitment to pay that he cannot repudiate afterwards. The payment method will have to be quick and easy.

•Possible options for payment are•mobile micropayment. •subscription to the service and creation of a gambler’s account (prepaid or postpaid option).

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Mobile commerce platform

Mobile Payment Service Mobile Micropayment

Content Billing

Advertising

Location Based Services

Customer:mobiledevices

MobileGateway

Micropayment

Public Key Infrastructure

Application Repository

Merchant:Point of Sale

Financial Institution

2. Upload application and credentials

2. Sign purchase order

3. Return signed purchase order

1. Send purchase order

Payment and clearing

1. Provide Customer‘s keys and certificate

Application and credential upload

4. Check signature

1. Registration process

Customer registration

a) Send collected purchase orders regularly

c) Clearing

b) Check purchase orders

2. Certification request

3. Create key pair and certificate


An example of a Business Model for m-Commerce Mobile Gambling - Mobile operators

and value chain•The operator should try to position himself in a key role in the value chain by providing the portal and participating in the revenues accrued by gambling services over its network.

•Those revenues will be significantly higher than the sheer increase in airtime charges.

•In order to achieve this a mobile operator should exploit its strengths (brand name, customer base, infrastructure, price control, etc.) effectively.

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An example of a Business Model for m-Commerce Mobile Gambling – Players and

Alliances•Players•The main players that could participate in the gambling value chain are:• the User, who decides about the bets • the Application Service Provider (ASP) providing the offers• the Internet Service Provider (ISP) providing web access• the Payment Service Provider (PSP) supporting the financial transactions and • the Mobile Operator that provides the network as well as the portal.•Alliances•The most promising scenario for mobile operators rests on his taking a key role in appropriate partnerships and business alliances, which are based on revenue sharing.

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An example of a Business Model for m-Commerce Mobile Gambling – Revenue Flow

UserPayment Service

Provider / Clearing House

Payment for service

Payment

Application Service Provider

Payment- For distribution

- For Access to the mobile channel

Payment- Once-off - For usage- Revenue sharing

Direct SubscriptionContent Payment

Internet Service Provider

Yearly / Monthly Fee (Subscription)

Operator

Pays for Access to Users

Portal

Operator Domain(may act as a portal)

Payment

Payment

Payment

Payment

Payment- Airtime- subscription- premium charge- access to content

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content• Definition• Attributes and Benefits• Drivers• Limitations• Differences in the User Experience• Mobile commerce from the Customer‘s point of view• Mobile commerce from the Provider‘s point of view• Business models

• New Possible Roles• Revenue Models for Content Providers

– User fee business model• Subscription fee and/or usage fees

– Shopping business model– Improved efficiency business model– Advertising business model– Revenue Sharing

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New Possible Roles• Mobile ISP: email and Internet access• Content Provider: Leverage control of the first screen

– Subscription fees, advertising, etc.

• Mobile Portal: one-stop solution– Messaging, PIM, personalization provider– Subscription fees, advertising, etc.

• Mobile Location Broker– Through partnership with location-based services

• Mobile Payment and Billing Provider• etc.

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Revenue Models for Content Providers

• User fee business model– Subscription fee and/or usage fees

• Shopping business model• Improved efficiency business model• Advertising business model• Revenue Sharing• …These models are often combined

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User Fee Business Model

• Often involves 3rd party billing provider• Two variations:

– Subscription fees – easier to collect– Per-use fee

Content Provider

3rd Party Billing Provider

Mobile UserMobile Content

User Fee (monthly subscription or actual usage fee)

Percentage of User Fee

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E-Tailing Business Model

• Another distribution channel• Likely to work well for some categories of services and products

– Movie tickets, flowers, last minute travel reservations– Impulse buying

• New scenarios: location-based comparison shopping, dial-a-coke, location-based delivery (e.g. pizza, taxi)

Mobile e-Tailer

Mobile Content

Mobile Shopper

Payment

Product/Service

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Improved Efficiency Model

• Customer convenience & lower costs• Examples: mobile banking, trading, ticketing

– Nordea: WAP Solo– Daiwa: By late 2000, 20% of all online trades– Airlines, movie theaters, public transportation

Mobile User &

Core Business Customer

Mobile Service/ContentContent Provider

Mobile InternetBusiness

Traditional Business

LowerOperating Costs

Service Usage/Transactions(possibly including payment)

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Advertising Business Model

• Challenge: Small screen, privacy, user tolerance• Opportunities:

– Mobile– Personalized– …Small Screen…

Mobile User

Mobile Service/Content incl. Promotional Info

Advertiser

Content Provider

Product/Service

Payment

AdvertisingFee

Promotional Info

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Mobile Advertising• Flat fee

– e.g. go2.com

• Traffic-based fee– CPM: cost per thousand ad impressions

• Performance-based fee– e.g. click-throughs, call-throughs, commission on sale

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Revenue Sharing Business Model

• Quite common, given the control of the customer by mobile operator

• Complexity of the value chain– Positioning, authentication, billing

• WASP model, e.g. Webraska, BlueFactory, etc.

Mobile User

Value-AddedMobileContent

ContentOwner

MobileContent Provider

Content

PaymentShare ofRevenue

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references• “M-Commerce , Technologies, Services, and Business Models”, by

Norman M. Sadeh, Wiley, 2002• “Service Scenarios and Business Models for m-Commerce“, Elisabeth Felt,

Britta Reufenheuser ,IST Mobile Summit 2002, Thessaloniki, Greece,2002• “An Introduction to e-Commerce,a Managerial Perspective“,

Turban,Prentice Hall , 2006• „ www.elsevier.com „ , 2006• „ www.nokia.com „ nokia reports, 20/5/2006• http://www.epaymentsnews.com

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http://www.elsevier.com/

http://www.nokia.com/

http://www.epaymentsnews.com/

۱۹ررر تیر۲۰۲۳ Sharif University of Tech 31

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Sharif University of Tech Kissing the Cell Phone! M-Commerce & it’s Business Models By: Ali Chekah Narges Aghabeigi Mohammad Hossein Eftekhari 15/اوت/19