M COMMERCE

ASSIGNMENT
INFORMATION TECHNOLOGY FOR
MANAGERS
TOPIC: MOBILE COMMERCE
CLASS : M.B.A I
SECTION : A
GROUP NUMBER : 12
GROUP MEMBERS:
11202057

ROHIT GANTAYAT

11202060

ABHISEK PATRO

11202059

RAJEEV

11202056

PARVEEN RANI

11202058

ANANNYA

CONTENTS :
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Mobile Commerce
History
Characteristics of m-commerce
Differences to E-Commerce
Application of m-commerce
Key actors in mobile commerce
Key issues of m -commerce
Security in m-commerce
Payment mechanisms for utilizing mobile services
Framework of m-commerce
Mobile commerce business model
Conclusion
References

Mobile Commerce
"Mobile Commerce is any transaction, involving the transfer of ownership
or rights to use goods and services, which is initiated and/or completed by using
mobile access to computer-mediated networks with the help of an electronic
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device."

Mobile Commerce

Mobile Commerce refers to wireless electronic commerce used

for conducting commerce or business through a handy device like cellular
phone or Personal Digital Assistant (PDAs). It is also said that it is the next
generation wireless e-commerce that needs no wire and plug-in devices.
Mobile commerce is usually called as 'm-Commerce' in which user can do
any sort of transaction including buying and selling of the goods, asking any
services, transferring the ownership or rights, transacting and transferring
the money by accessing wireless internet service on the mobile handset
itself.
The next generation of commerce would most probably be mobile commerce
or m-commerce. Presuming its wide potential reach all major mobile handset
manufacturing companies are making WAP enabled smart phones and
providing the maximum wireless internet and web facilities covering
personal, official and commerce requirement to pave the way of mcommerce that would later be very fruitful for them.
History :

launched in 1997 by Merita Bank of Finland, also using SMS.

In 1998, the first sales of digital content as downloads to mobile phones were
made possible when the first commercial downloadable ringtones were
launched in Finland by Radiolinja (now part of Elisa Oyj).
Two major national commercial platforms for mobile commerce were
launched in 1999: Smart Money in the Philippines, First thought up by Matt
Wilson. Mobile commerce was born in 1997 when the first two mobile-phone
enabled Coca Cola vending machines were installed in the Helsinki area in
Finland. The machines accepted payment via SMS text messages. The first
mobile phone-based banking service was and NTT DoCoMo's i-Mode Internet
service in Japan. i-Mode offered a revolutionary revenue-sharing plan where
NTT DoCoMo kept 9 percent of the fee users paid for content, and returned
91 percent to the content owner.

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Mobile-commerce-related services spread rapidly in early 2000. Norway

launched mobile parking payments. Austria offered train ticketing via mobile
device. Japan offered mobile purchases of airline tickets.The first conference
dedicated to mobile commerce was held in London in July 2001.
The first book to cover mobile commerce was Tomi Ahonen's M-profits in
2002.The first university short course to discuss mobile commerce was held
at the University of Oxford in 2003, with Tomi Ahonen and Steve Jones
lecturing. As of 2008, UCL Computer Science and Peter J. Bentley
demonstrated the potential for medical applications on mobile devices.
PDAs and cellular phones have become so popular that many businesses are
beginning to use mobile commerce as a more efficient way to communicate
with their customers.In order to exploit the potential mobile commerce
market, mobile phone manufacturers such as Nokia, Ericsson, Motorola, and
Qualcomm are working with carriers such as AT&T Wireless and Sprint to
develop WAP-enabled smartphones. Smartphones offer fax, e-mail, and
phone capabilities.
"Profitability for device vendors and carriers hinges on high-end mobile
devices and the accompanying killer applications," said Burchett. Perennial
early adopters, such as the youth market, which are the least price sensitive,
as well as more open to premium mobile content and applications, must also
be a key target for device vendors.
Since the launch of the iPhone, mobile commerce has moved away from SMS
systems and into actual applications. SMS has significant security
vulnerabilities and congestion problems, even though it is widely available
and accessible. In addition, improvements in the capabilities of modern
mobile devices make it prudent to place more of the resource burden on the
mobile device.
.CHARATRISTICS

OF M-COMMERCE :

The primary criterion of mobility is the method of access .Not all

mobile devices provide a mobile access to telecommunication networks. For
instance, a laptop, even though a mobile device, generally uses stationary
access to networks. Even when a laptop connects to a wireless network, its
usage, while on the move, is limited by factors such as size and weight. On
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the other hand, telematics devices mounted in vehicles are capable of

providing mobile access to telecommunication networks. The computermediated networks may be partially or even fully wired, as long as they are
able to receive and handle requests sent by mobile electronic devices. Some
parts of a transaction may be processed in a stationary sector. For example,
ordering clothes using a mobile phone is an m-commerce transaction, even
when the transaction is processed by stationary computers, the ordered
goods are sent by snail mail and paid against an invoice. What is important is
that at least the initiation or the completion is carried out using mobile
access via an electronic device.The completed transaction need not have a
monetary character if the transaction is carried out as a marketing measure
or as an after-sales service.

DIFFERENCES TO E-COMMERCE:
M-commerce is characterized by some unique features that equip it with
certain advantages against conventional forms of commercial transactions,
including e-commerce.

Ubiquity:
Ubiquity means that the user can avail services and carry out
transactions largely independent of his current geographic location (the
anywhere feature). This feature can be useful in many situations, e.g. to
cross-check prices while standing in a supermarket or while on the move.

Immediacy:
Closely related to ubiquity is the possibility of real-time
availment of services (the anytime feature). This feature is particularly
attractive for services that are timecritical and demand a fast reaction, e.g.
stock market information for a broker. Additionally, the consumer can buy
goods and services as and when he feels the need. The immediacy of
transaction helps to captureconsumers at the moment of intention so that
sales are not lost in the hiatus between the point of intention and that of
actual purchase.

Localization:
Positioning technologies, such as the Global Positioning
System (GPS), allow companies to offer goods and services to the user
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specific to his current location. Location-based services can thus be offered

to meet consumer needs and wishes for localized content and services.

Instant connectivity:
Ever since the introduction of the General Packet Radio
Service (GPRS) mobile devices are constantly online, i.e. in touch with the
network (the always on feature). This feature brings convenience to the
user, as time consuming dial-up or boot processes are not necessary.

Pro-active functionality:
By virtue of its ability to be immediate, local and personal, mcommerce opens new avenues for push-marketing, such as content and
product offers. Services like Opt-in advertising can be offered, so that a
user may choose those products, services and companies that he wants to
bekept informed about. The Short Message Service (SMS) can be used to
send brief text messagesto consumers, informing them of relevant local
offerings that best suit their needs. This feature ensuresthat the right
(relevant) information can be provided to the user at the right place, at the
right time. The user too does not have to fear missing some potentially
crucial information or getting it too late.

Simple authentication procedure:

Mobile telecommunication devices function with an electronic
chipcalled Subscriber Identity Module (SIM). The SIM is registered with the
network operator and the owner is thus unambiguously identifiable. The
clear identification of the user in combination with an individual Personal
Identification Number (PIN) makes any further time-consuming, complicated
and potentially inefficient authentication process redundant.

Application of m-commerce:
1} Mobile ticketing

Tickets can be sent to mobile phones using a variety of technologies. Users are then
able to use their tickets immediately, by presenting their phones at the venue.
Tickets can be booked and cancelled on the mobile device with the help of simple application
downloads, or by accessing the WAP portals of various travel agents or direct service providers.

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2} Mobile vouchers, coupons and loyalty cards

Mobile ticketing technology can also be used for the distribution of vouchers,
coupons, and loyalty cards. These items are represented by a virtual token that is sent to the
mobile phone. A customer presenting a mobile phone with one of these tokens at the point of sale
receives the same benefits as if they had the traditional token. Stores may send coupons to
customers using location-based services to determine when the customer is nearby.
3} Content purchase and delivery

Currently, mobile content purchase and delivery mainly consists of the sale of ringtones, wallpapers, and games for mobile phones. The convergence of mobile phones, portable
audio players, and video players into a single device is increasing the purchase and delivery of
full-length music tracks and video. The download speeds available with 4G networks make it
possible to buy a movie on a mobile device in a couple of seconds.
4} Location-based services

The location of the mobile phone user is an important piece of information used during
mobile commerce transactions. Knowing the location of the user allows for location-based
services such

Local discount offers

Local weather

Tracking and monitoring of people

5} Information services

A wide variety of information services can be delivered to mobile phone users in

much the same way as it is delivered to PCs. These services include:

News

Stock quotes

Sports scores

Financial records

Traffic reporting

Customized traffic information, based on a user's actual travel patterns, can be sent to a mobile
device. This customized data is more useful than a generic traffic-report broadcast, but was
impractical before the invention of modern mobile devices due to the bandwidth requirements.
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6} Mobile banking

Banks and other financial institutions use mobile commerce to allow their customers to
access account information and make transactions, such as purchasing stocks, remitting money.
This service is often referred to as Mobile Banking, or M-Banking.
7} Mobile StoreFront

The reinvention of the mobile phone as a touch sensitive handheld computer has for
the first time made mobile commerce practically feasible. 'According to ABI Research, mobile is
going to get a lot bigger in the ecommerce market. The research firm is predicting that in 2015,
$119bn worth of goods and services will be purchased via a mobile phone.'
8} Mobile brokerage

Stock market services offered via mobile devices have also become more popular
and are known as Mobile Brokerage. They allow the subscriber to react to market developments
in a timely fashion and irrespective of their physical location.
9} Auctions

Over the past three year mobile reverse auction solutions have grown in
popularity Unlike traditional auctions, the reverse auction (or low-bid auction) bills the
consumer's phone each time they place a bid. Many mobile SMS commerce solutions rely on a
one-time purchase or one-time subscription; however, reverse auctions offer a high return for the
mobile vendor as they require the consumer to make multiple transactions over a long period of
time.
.

10} Mobile Browsing

Using a mobile browsera World Wide Web browser on a mobile devicecustomers

can shop online without having to be at their personal computer.
11} Mobile marketing and advertising

In the context of mobile commerce, mobile marketing refers to marketing sent to

mobile devices. Companies have reported that they see better response from mobile marketing
campaigns than from traditional campaigns. Mobile campaigns must be based on the global
Content Generation or what is called Generation C and four other 'C's: Creativity, Casual
Collapse, Control, and Celebrity. A brief introduction... Creativity: let's face it, we're all creative,
if not artists! (Notice we didn't mean talented artists ;-). And as creativity normally leads to
content, the link with GENERATION C is obvious. Which then brings us to Casual Collapse: the
ongoing demise of many beliefs, rituals, formal requirements and laws modern societies have
held dear, which continue to 'collapse' without causing the apocalyptic aftermath often predicted
by conservative minds.

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Key actors in mobile commerce:

KEY ISSUES OF M-COMMERCE:

The success of M-Commerce depends on:

Evolution:
Technology and Business models are constantly evolving
which will demand flexibility and patience on part of all players.

Customer loyalty:
Who will own the customer? Partnerships among
players from various industries will be necessary for most, if not all, mcommerce initiatives, and, in turn, will alter the nature of any one company
to own their own customers.

Moving up the value chain:

To respond to market opportunities some
companies have develop subsidiaries in order to react more rapidly to market
challenges. For example, Sonera has developed Sonera Zed, to provide portal
and application management services such as location based mobile yellow
pages as well Smart Trust, to develop secure solution for m-commerce
transactions. And Citicorp has established e-Citi to develop a wireless access
gateway strategy for financial service providers.
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Security in m-commerce:
Mobile applications will differ from standard e{commerce
applications, because the underlying technology has fundamental diferences:
Limitations of Client Devices.

Current (and looming) PDAs are limitedin memory, computational

power, cryptographic ability, and (for the timebeing) human I/O. As a consequence,
the user cannot carry his entire statealong with him, cannot carry out sophisticated
cryptographic protocols, andcannot engage in rich GUI interaction.

Portability of Client Device.

PDAs have the potential to accompany users on all activity, even
traditionally online actions away from the desk-top. Besides creating the potential
for broader permeation ofe{transactions,this fact also makes theft, loss, and
damage of client devices much more likely.

Hidden and Unconscious Computing.

Both to compensate for limitedPDA storage, as well as to provide new ways
to adapt a user's comput-ing environment to her current physical environment,
pervasive computing (PvC) often permits client devices to transparently interact
with theinfrastructure|without the user's direct interaction. This unconcsious interaction can include downloading executable content .

Location{Aware Devices.
When the user is mobile, the infrastructure canpotentially be aware of the
location of the user (e.g., in a particular telephonecell). This knowledge introduces a
wide range of applications which have no analogue in the stationary user model

Payment mechanisms for utilizing mobile

services:
Having described various m-commerce applications, we now look at the
payment mechanisms required for availment of these applications. There are a number
of such mechanisms:
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Payment by credit card:

In this method, the charges for services are billed against the credit card of the
subscriber. The subscriber can inform the service provider about his credit card number, e.g. via
WAP interface.

Payment via telephone bill:

A comfortableway of paying for mobile servicesis payment via the monthly telephone
bill that the network carrier sends to eachsubscriber. The carrier may collect theamount on
behalf of the provider againsta certain service charge.

Mobile payment:
This term refers to payments that are made via mobile hand-held devices in order
to purchasegoods and services. Mobile payment services usually act as an intermediary
between consumer and vendor.Prominent examples of such services are Mobile Wallet, a
service by T-Mobile, and the m-pay of Vodafone. It is a hybrid form of payment that combines
elements from other methods of payment, e.g. credit cards, prepaid cards,invoicing and
telephone bills.Both, the customer and the vendor get themselves registered with the payment
service. Eachsubscriber gets an individual PIN to authenticate himself via WAP or SMS, in order
to makepayments for his purchases. The advantage to the subscriber lies in the fact that he
does not need to get himselfregistered with each individual vendor.

framework of m-commerce:
M-commerce, like e-commerce, requires transparent and clear regulations
as the contracting parties do notnecessarily know each other and there is hardly, if any, face-toface contact while negotiating an agreement. This anonymity makes many potential customers
suspicious of electronic transactions.Their worry about the privacy and safety of personal data
(e.g. credit card information) and its potential misuse is well-known. The contracting parties
should therefore be able to count upon the law, where required, to enforce the provisions of
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contracts concluded using mobile electronic devices.Further, the customer should be able to
trust that his personal privacy is always maintained.A clearly defined regulatory framework is
hence indispensable to boost consumer confidence and to increase acceptance amongst broad
sections of the society as well as to ensure smooth functioning of m-commerce. Being a
relatively new phenomenon, however,it has not yet attracted the attention of lawmakers in most
countries as an independent business field. Its transactions are usually governed by ecommerce regulations, supplemented by telecommunication lawsMobile commerce (mcommerce) refers to an ability to conduct wireless commerce transactions using
mobile applications in mobile devices. M-commerce applications can range from as
simple as an address book synchronization to as complicated as credit card
transactions. M-commerce is expected to grow dramatically in the near future
supporting simple to complex commerce transactions. Even though the Wireless
Application Protocol (WAP) is designed to facilitate the development of wireless
applications, it will not be sufficient to handle complex business transactions that
require cooperation of different service applications. In order to handle these
complex mobile commerce transactions efficiently, an intelligent, robust and
scalable framework that provides diverse m-commerce services is required.

MOBILE COMMERCE BUSINESS MODEL:

Timmers (Timmer, 1999) defined the business model to describe the
economic stakeholder categories, theproducts and services offered, how the
stakeholders interact, the information and goods that flow, the sourcesof
revenue, how the economic yield is shared among the stakeholders, and how
they are related with theabove flows (Lim and Siau, 2003). This definition will
be applied in aiding in constructing the M-Commercebusiness model in this
research.The current 3G technology allows a higher transmission rate to
provide M-Commerce value-addedservices. Taken this into consideration, the
traditional mobile operator centric business model cannotdescribe the interrelationship of each entity clearly and completely as the emerging valueadded MCommerceapplications. Therefore a new business model which is
suitable for the current M-Commercemarket is necessary to construct. Figure
1 represents the proposed M-Commerce business model from themobile
device manufacturers point of view, which outlines the roles they may play
in the futuredevelopment of M-Commerce. With the proposed business
model, 3G telecom operators are still the mostcrucial members., who now
has to work closely with content/data providers, application/portal
vendors,platform vendors and the mobile device manufacturers in providing
quality voice and data services to users.It can be seen that the relationship
has changed from that of the traditional mobile operator centric
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buisnessmodel in which revenue is only shared between the different service

providers and the mobile operators. Theinteroperability between the
platforms must be established to provide seamless roaming by the
mobileoperators through their platform vendors. More parties are involved in
the process of providing value-addedservices and applications to mobile
users.

There is a close cooperation between the mobile device manufacturer and the
chip/processor
manufacturer. Although a small number of mobile terminal manufacturers have
their own chip/processomanufacturing facilities, most have to work with external
chip/processor manufacturers; therefore, thechip/processor manufacturer is an
important party for cooperation in development. The mobile device OS(Operating
System) is dominated by three major stakeholders: Symbian, Microsoft and Linux.
The OSchosen has to match well with the requirements of the mobile device, such
as display format managementand battery management issues.

CONCLUSION:
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As m-commerce applications and wireless devices are evolving rapidly, one
will take forward the other one towards empowering innovation, versatility and
power in them. There are a number of business opportunities and grand challenges
of bringing forth viable and robust wireless technologies ahead for fully realizing the
enormous strength of m-commerce in this Internet era and thereby meeting both
the basic requirements and advanced expectations of mobile users and providers.
There are news articles and pictures displaying people, who are ordering things
over the Internet while waiting for a bus, downloading merchant coupons on their
PDAs as they enter a store or bidding for the last table at a hot restaurant by digital
phone in a spur-of-the-moment auction. Actually this process represents a tip of a
very big iceberg. The advent of m-commerce, as widely referred to among the
users, has far-reaching implications.

REFERENCES:

The Ecology of Mobile Commerce: Charting a Course for Success Using Value Chain
Analysis, Andreas Rulke, Anand Iyer, & Greg Chiasson (PRTM)

The Wireless Application Protocol: Strategic Implications for Wireless Internet Services,
Stuart J Barnes (Victoria University of Wellington)

Mobile Business Services: A Strategic Perspective, Jukka Alanen (McKinsey &

Company) & Erkko Autio (Helsinki University of Technology)

M-Commerce and Coca Cola, Mark S. Lee (Coca Cola)

M-Commerce in the Automotive Industry: Making a Case for Strategic Partnerships, Rick
Solak, Mark Schrauben,

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