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Overview of m-commerce
M-commerce: definitions
� Mobile e-commerce (also called mobile commerce or m-commerce) is defined as all activities related to a
(potential) commercial transaction conducted through communications networks that interface with wireless (or
mobile) devices.
� Mobile electronic commerce (M-Commerce) is any type of transaction of an economic value having at least at
one end a mobile terminal and thus using the mobile telecommunications network.
� Mobile commerce is the buying and selling of goods and services through wireless hand-held devices such as
mobile phones, personal digital assistants (PDAs), mp3 players, digital cameras, handheld gaming devices and
computers.
� Mobile commerce is defined as any transaction with a monetary value that is conducted via a mobile
telecommunications network.
� M-commerce is the use of mobile handheld devices to communicate, interact and conduct transactions via a
mobile or wireless network.
� M-commerce is all about wireless e-commerce that is where mobile devices are used to do business on the
internet. � Mobile commerce is exchanges or buying and selling of commodities, service, or information on the
internet by using mobile handheld devices.
� A mobile commerce transaction may involve multiple network components such as location database, user
preference database, and multicast server. Also different transactions may require very different types and number of
network components.

M-commerce: characteristics
� The mobile business industry presents a certain number of peculiar economic characteristics such as mobility,
network effects and proprietary assets.
① Mobility is the most important characteristic of mobile business, because it represents its only distinctive
advantage upon which mobile services can build their value proposition.
a. Freedom of movement: services can be used while on the move.
b. Ubiquity: the possibility of using services anywhere, independent of the user's location.
c. Reachability: users can be reached anywhere anytime, and they can restrict it to particular persons and contexts
d. Convenience: as mobile devices are always at hand
e. Some constraints: limited and more expensive bandwidth
② Network effects: networks are composed of a set of components connected together by links. Since the provision
of a service typically requires several components, they are complementary to each other. Because of this
complementarity’s, networks exhibit a characteristic economic phenomenon known as network effects, an example of
what economists call a positive consumption externality.
③ Exclusive control over important assets: the mobile business market is also characterized by the existence of
important assets that are under the exclusive control of a firm. Network operators also have total control over a
number of other important assets.
④ Implications: from these characteristics it follows that the provisioning of complete mobile services solutions
requires the collaboration of a large number of market players, especially including network operators and device
manufacturers.

� Mobile commerce: Attributes and Benefits

① Specific attributes of m-commerce (Mobility, Broad reach)
② Benefits of value-added attributes (Ubiquity, Convenience, Instant connectivity, Personalization, Localization of
products and services)

The characteristics of m-commerce

M-commerce: generations
� 1G (Analog network): The first generation of wireless technology, which was analog based
� 2G (Digital network): The second generation of digital wireless technology; accommodates mainly text
� 2.5G (GPRS): Interim wireless technology that can accommodate limited graphics
� 3G (Broadband network): The third generation of digital wireless technology; supports rich media such as video
clips
� 4G: The expected next generation of wireless technology

Mobile evolutions
Framework for m-commerce
� To help future applications and technologies handle m-commerce, we propose the framework as shown in figure.
This framework will allow developers and providers to strategize and effectively implement mobile commerce
applications. The framework defines multiple functional layers, simplifying the design and development, so different
parties (vendors, providers, and designers, etc.) can focus on individual layers.

A framework for m-commerce

This framework has four levels: m-commerce applications, user infrastructure, middleware, and network
infrastructure. It shows that the design of new mobile commerce applications should take into consideration the
general capabilities of user infrastructure (mobile devices), and not the individual devices. The framework also
provides a developer and provider plane to address the different needs and roles of application developers, content
providers, and service providers. Each one of these could build its products and services using the functionalities
provided by others.

� There are many wireless services and applications under the umbrella of m-commerce, generally they are grouped
into two categories: consumer-based and business-based. Consumer-based m-commerce applications refer to
normal daily commerce activities that are most likely to be conducted by anyone who is a user of a wireless device.
Examples include receiving stock prices, finding restaurants, getting driving directions, shopping on-line, etc.
Business-based m-commerce refers to business applications that are applied in a corporate or business environment
to facilitate business transactions and to improve productivity within a company. Examples in this category include
mobile inventory tracking systems, mobile offices, wireless data centers, etc.

M-commerce: infrastructure
� Wireless networking infrastructure
� Networking support from wireless networks is crucial in realizing mobile commerce applications. There have been
significant advances in wireless and mobile networks in the last few years in terms of protocols, standards,
technologies, quality of service, and user acceptance.

A comparison of several mobile and wireless networks

� Mobile commerce applications would present five general networking requirements: location management,
multicast support, network dependability, and support for Quality-of-Service, and the ability to roam across
multiple wireless networks. To help network designers and developers, these five networking requirements into more
specific attributes are translated as shown in table
 Wireless infrastructure requirements for mobile commerce

� A global and comprehensive wireless infrastructure for mobile commerce applications as shown in figure 8. A
mobile user can use mobile commerce applications in several different ways. It could be through infrastructure-based
wireless networks such as cellular, PCS, and GSM networks, or could be through an ad hoc wireless network that can
connect to the IP-based networks via satellites. A user could connect directly via satellite-based systems. In this
scenario, a mobile user can roam across multiple different wireless networks and a dynamic QoS negotiation may be
required due to vastly different resources and users of these networks. This infrastructure also supports efficient
location management, multicast, and provides fault-tolerance to increase levels dependability. Since a user may access
multiple networks that may provide different levels of horizontal and vertical location accuracy, response time and
transaction rate, it may be possible to select one wireless network for mobile commerce transaction by translating
location requirements of applications to specific attributes. Loss of access to one or more wireless networks due to
various failures could be overcome by switching to the remaining wireless network and still support most of the
requirements of m-commerce applications.

M-commerce: applications
Emerging applications
(Various classes of m-commerce applications have been defined.)
� Be classified as mobile financial services, mobile advertising, mobile shopping, mobile entertainment, mobile
office, mobile inventory management, mobile education, mobile telematics, and mobile information
management. Within these classifications, various services may be identified, for example, mobile financial
services includes services such as mobile banking, mobile broking, mobile cash, mobile payment, mobile e-billing and
mobile e-salary. Mobile shopping would involve services such as mobile retailing, mobile auctions, mobile ticketing,
mobile reservations and even mobile postcards.
� There are potentially an unlimited number of mobile commerce applications, a few important classes of
applications are identified and some examples within each class are provided.
 Classes of m-commerce applications

Functional platform of m-commerce applications

� There are many ways mobile devices are used to conduct business and exchange information. The emerging
unlimited number of potential mobile commerce applications can be classified into the following five platforms set out
in table

Functional platform of m m-commerce applications

Scenarios for m-commerce applications

� Mobile financial applications (MFA): Mobile financial applications are likely to be one of the most important
components of m-commerce. These could involve a variety of applications such as mobile banking and brokerage service,
mobile money transfer, and mobile micro-payments as shown in figure.
 Several mobile financial services
� Mobile advertising: Mobile advertising is also a very important class of m-commerce applications. Using demographic
information collected by wireless service providers and information on the current location of mobile users, very targeted
advertising can be done.

A possible scenario for mobile advertising and shopping

� Mobile inventory management (MIM): This class of applications involves location tracking of goods, services, and
possibly even people. The tracking of goods may help service providers in determining the time of delivery to customer,
thus improving customer service and obtaining a competitive edge over other businesses.
� Product location and search (PLS): This class of applications includes locating an item in a particular area or
location, which concerns with finding an item (or person) with certain specifications, and whether it is available in a
specified area or not.
� Proactive service management (PSM): This class of applications is based on collecting pertinent information about
current or near-future user needs and providing services to users proactively. One such application may involve collecting
information about the aging components of an automobile

Information transmission on aging automobile components to dealers

� Wireless business re-engineering: Many insurance business situations involve going to customers premises, taking
notes of a particular situation, going back to the office, and then taking suitable actions. This process takes a long time and
is not very efficient. To improve this business practice, a wireless business re-engineering application can be used which
allows on-the-spot claim adjustment.

� Mobile auction, entertainment and other services: With an increasingly mobile society, more and more people are
on the move. While mobile, people may prefer to be involved in some business or entertainment activities. Many of these
services can be offered to people through mobile devices and wireless networks. These include mobile auction/reverse
auction, video-on-demand services, and other entertainment-oriented services.