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POSTECH
Mobile Commerce
Prof. Euiho Suh2004. 10. 18
POSMIS
2 POSMIS
Contents
1. Definition and differences of M-commerce
2. Classes of M-commerce applications
3. Value Chain
4. Terminology and Standards
5. Attribute of M-commerce
6. The driver of M-commerce
7. Mobile Computing Infrastructure
8. Wireless Standards and Security
9. Applications : finance, shopping
10. Location-based Commerce
11. Limitations of M-commerce
12. Technical Limitation
3 POSMIS
Definition of Mobile Commerce
Any transaction conducted over a mobile telecommunications network.
It represents a subset of all e-commerce transactions both in business-to-consumer and the business-to-business area
4 POSMIS
Differences between M- and E- commerce
A permanent factor that makes difference between M- and the rest of the E- commerce is the possibility of the user to engage anywhere and anytime in M-commerce transactions; for some this is the crucial difference
The main functional distinction between the E-commerce in general and M-commerce are dynamic Location Based Services (LBS) that use the actual location of the terminal on earth in one way or the other to perform the transaction (cf. ordering taxi in a foreign city based on the positioning of the terminal and the taxi)
5 POSMIS
Differences between M- and E- commerce (Cont.)
Further difference are the properties of the truly portable terminals: the simple UI facilities, slower processor, and smaller memory resources, as well as tiny energy reserves, as compared to PC:s or laptops
A fourth main difference is the relatively small wireless link transmission capacity offered to the terminals; although the capacity is increasing with every network generation (10 kbps, 100 kbps, 1 Mbps..), so is the capacity of the fixed networks; thus the gap will exist also in the future
6 POSMIS
Classes of M-Commerce Applications
7 POSMIS
Source: Durlacher, Veba
Job Dispatch
Telemetry
Information Provisioning
Banking Ticketing
Broking
Telematics
CRM
1998 1999 2000 2001 2002 2003 2004
Advertising
WASP
Auctions
Shopping
Music
Supply chainIntegration
Healthcare
Games
Video
SMSSMS Toolkit
WAP GPRS EDGE UMTS
SMS Chat
E - mail
IM
PIM
Customer care UIM
M – Commerce Applications
M – CommerceEnabling Applications
M-payment
Reservations E-bill E-salary
InformationManagementSecurity
Classes of M-Commerce Applications (Cont.)
8 POSMIS
Mobile Commerce Value Chain
Source : The mobile commerce value chain: analysis and future developments, Stuart J. Barnes, International Journal of Information Management 22 (2002) 91–108
9 POSMIS
M-Commerce Terminology
Generations 1G: 1979-1992 wireless technology 2G: current wireless technology; mainly
accommodates text 2.5G: interim technology accommodates
graphics 3G: 3rd generation technology (2001-2005)
supports rich media (video clips) 4G: will provide faster multimedia display
(2006-2010)
10 POSMIS
Terminology and Standards
GPS : Satellite-based Global Positioning SystemPDA : Personal Digital Assistant—handheld wireless computerSMS : Short Message ServiceEMS : Enhanced Messaging ServiceMMS : Multimedia Messaging ServiceWAP : Wireless Application ProtocolSmartphones : Internet-enabled cell phones
with attached applications
11 POSMIS
Specific Attributes of M-Commerce
Attributes of m-commerce and its economic advantages
Mobility — users carry cell phones or other mobile devices Broad reach — people can be reached at any time
12 POSMIS
Attributes of M-Commerce (cont.)
Value-added attributes of m-commerce Ubiquity easier information access in real-time Convenience devices that store data and have Internet, intranet, extranet
connections Instant connectivity easy and quick connection to Internet, intranets, other mobile
devices, databases Personalization preparation of information for individual consumers Localization of products and services knowing where the user is located at any given time and match
service to them
13 POSMIS
Characteristics of M-Commerce
14 POSMIS
The Drivers
Widespread availability of devices
No need for a PC Handset culture Vendors’ push
Declining prices Improvement of
bandwidth Explosion of EC in
general
15 POSMIS
Mobile Computing Infrastructure
Cellular (mobile) phones
Attachable keyboard
PDAs Interactive pagers Other devices
Notebooks Handhelds Smartpads
Screenphones—a telephone equipped with color screen, keyboard, e-mail, and Internet capabilities
E-mail handhelds Wirelined—connected
by wires to a network
Hardware
16 POSMIS
Mobile Computing Infrastructure (cont.)
Unseen infrastructure requirements Suitably configured wireline or wireless WAN
modem Web server with wireless support Application or database server Large enterprise application server GPS locator used to determine the location of
mobile computing device carrier
17 POSMIS
Mobile Computing Infrastructure (cont.)
Microbrowser Mobile client operating system (OS) Bluetooth—a chip technology and WPAN standard that enables
voice and data communications between wireless devices over short-range radio frequency (RF)
Mobile application user interface Back-end legacy application software Application middleware Wireless middleware
Software
18 POSMIS
Mobile Computing Infrastructure (cont.)
Networks and access Wireless transmission media
Microwave Satellites Radio Infrared Cellular radio technology
Wireless systems
19 POSMIS
Wireless Standards and Security
M-commerce supported by Standards Security Voice systems
20 POSMIS
Wireless Standards
Wireless standards Time-division Multiple Access (TMDA) General Packet Radio Services (GPRS) Code Division Multiple Access (CDMA) CDMA One Global System of Mobile Communication
(GSM) WLAN 802.11b (Wi-Fi) Wideband CDMA
21 POSMIS
Wireless Standards (cont.)
Wireless Application Protocol (WAP)—a set of communications protocols designed to enable different kinds of wireless devices to talk to a server installed on a mobile network, so users can access the Internet
Subscriber Identification Module (SIM) Wireless Markup Language (WML) Voice XML (VXML) Enhanced Data Rates for Global Evaluation
(EDGE) Universal Mobile Telecommunications System
(UMTS) IPv6
22 POSMIS
Security Issues
VirusesSmart card security solutions
Voice communication can be intercepted by hackers
One solution is an embedded biometric add-on
Back-end security solutions public key infrastructure (PKI) and M-CERT
(mobile certification)
23 POSMIS
Voice Systems for M-Commerce
Hands-free and eyes-free operations increase productivity, safety, effectiveness
Disabled people can use voice data for various tasks
Voice terminals are portable2 ½ times faster than typingFewer errors
24 POSMIS
Applications : mobile financial
Wireless electronic payment systems Mobile phones become secure, self-
contained purchasing tools capable of instantly authorizing payments over the cellular network for goods and services consumed
Micropayments—electronic payments for small-purchase amounts (generally less than $10)
25 POSMIS
M-wallet (mobile wallet)—a wireless wallet that enables cardholders to make purchases with a single click from their wireless devices
Bill payments directly from cell phone via: Bank Credit card Prepaid arrangement
Applications : mobile financial (cont.)
26 POSMIS
Applications : mobile financial (cont.)
Swedish Postal Bank
Dagens Industri Citibank Japanese banks
Hoover’s wireless (hoover.com)
ASB Bank (New Zealand)
Boston’s Faneuil Hall Marketplace
27 POSMIS
Bill Payments by Cell Phone
28 POSMIS
Applications : Shopping from Wireless Devices
Buy.com allows shopping from wireless devices
In 5-10 years most businesses will be wireless
Online stores will become showrooms View products Purchase them using handheld devices Possibly enhanced by bar code scanners Customization may be possible
29 POSMIS
Applications : Shopping from Wireless Devices (Cont.)
30 POSMIS
Location-Based Commerce
Location-based commerce (L-commerce) e-commerce applications provided to customers based on a
user’s specific location
Location-based technologies Global positioning systems—a wireless system that uses
satellites to enable users to determine their position anywhere on the earth
Geographical information systems (GIS)—relates longitude and latitude of GPS into place or address (mapinfo.com)
GPS on handsets—stand-alone units for tracking applications
31 POSMIS
Location-Based Services Involving Maps
32 POSMIS
GPS System
33 POSMIS
Applications : Telematics and Telemetry
Telematics—integration of computers and wireless communications to improve information flow using the principles of telemetry GM OnStar system—cellular phone and PDA are
integrated to provide personal information management, mobile Internet services, entertainment on the vehicle vehicle dashboard
Sophisticated text-to-speech and voice recognition capabilities minimize driver distraction
34 POSMIS
Applications : Telematics and Telemetry (Cont.)
Use as a remote vehicle self-diagnostics tool Daimler-Chrysler and Volvo experimented with
installation of GSM chip sets in cars Monitor performance and to provide an early
warning system for potential problems Chip sends a message to the manufacturer
indicating what the problem is Manufacturer’s system analyzes various data
and provides a fix (via a software tool) Developing faults found before they become critical
and continuous operation of the car can be ensured
35 POSMIS
Barriers to Location-Based Commerce
The accuracy of some of the location technologies
The cost-benefit justification
M-spam
The bandwidth of GSM networks
36 POSMIS
Limitations of M-Commerce
Usability problem Usability of a site is critical to attract
attention and retain user stickiness Effectiveness, efficiency, satisfaction Some mobile devices are found to be
ineffective Customers want to find exactly what they
are looking for, easily and quickly, not possible in the 2G text-based environment
More and faster multimedia will be available as 3G spreads
37 POSMIS
Technical Limitations
Lack of standardized security protocol
Security methodology needs to be incorporated in mobile
Customer confidence is low
Insufficient bandwidth
Limits the extent to which mobility can be viewed commodity
3G licenses Auctioned by
governments Certain countries cannot
be served by these devices
Transmission & power consumption limitations
Multipath interference Weather and terrain
problems Distance-limited
connections
38 POSMIS
Technical Limitations (cont.)
WAP limitations Speed—in 2002 connections to WAP sites are
still too slow Cost—fees for mobile phone users are still too
high Accessibility—as of spring 2002, fewer than
50,000 WAP-accessible sites worldwide (must be written in WML)
39 POSMIS
Technical Limitations (cont.)
Potential health hazards Fear of radiation Unsafe to drive and use wireless phone Cell phones may interfere with sensitive
medical devices (pacemakers) Lawsuits relating to the potential health
hazards of wireless devices have already been filed—public is advised to adopt a precautionary approach in using mobile phones (earphone device)