Mobile Commerce

New Opportunities for B2B and B2C Services Offered by New Mobile Communication Technologies

Dane Marjanovic Christoph Mller Thomas Schnenberger

Timetable

Mobile Technology Mobile Market Forecast into 4th Generation

A short history of mobile communication

1958 in Germany, the A1 net was established

In 1970 it has had a coverage of

80% of the area and 95% of the population in Germany.

The limitation was by 11000 users 1986 the network was working to full capacity of 27000

In 1972 an new net was established

A short history of mobile communication

1986 the third analog network was established The limitation was by 400000 costumers in Germany 31.12.1999 Swisscom stops the network

A short history of mobile communication

In 1982 the European Conference of Postal and Telecommunications Administrations founded a working group. 1987 the Global System for Mobile communications standard was available 1991 in Switzerland the first devices are presented In 1995 SMS was available

GSM

The DCS-900 standard has 124 channels The DCS-1800 (established in 1995) has 372 channels. Each channel has 8 slots Each slot has a capacity of 9600 bit/s

2G

HSCSD, GPRS und Edge

HSCSD stands for High Speed Circuit Switched Data

Use more slots for one connection Uses simple error correction and has a speed of 14400 bit/s It has different service classes and the user is always online

GPRS stands for General Packet Radio Services

2.5G

HSCSD, GPRS und Edge

Edge stands for Enhanced Data Rates for GSM Evolution

It accelerates the data communication up to 473,6 kbit/s It needs new technology on the operator side

2.5G

UMTS

UMTS stands for Universal Mobile Telecommunication Service

The maximum data transmission rate is 2 Mbit/s Simpler extension of the net Break-through of the technology in the year 2010

3G

SMS, MMS and WAP

SMS stands for Short Message Service

The message payload is 140 bytes By 2004 more 500 billion messages were sent per year. In the year 2000 just 17 billion were sent. The most frequenter texters are in Singapore. About 2300 SMS per year in 2003

SMS, MMS and WAP

MMS stands for Multimedia Messaging System

MMS was originally developed for 3G

WAP stands for Wireless Application Protocol

iMode

iMode was developed by DoCoMo in Japan It was launched February 22, 1999 There are 3000 content-providing companies for iMode August 2004 there were 43 million customers in Japan, and over 3 million in the rest of the world

PDAs

PDA stands for Personal Digital Assistant Three different Operating systems are available:

Palm OS was developed by US Robotics

By August 2003 there where more then 19000 applications available real-time operating system runs also under Smartphone under or the Sega Dreamcast

Windows CE is a variation of Microsoft's Windows

Symbian OS was original developed Psion by the name EPOC

Timetable

Mobile Technology Mobile Market Forecast into 4th Generation

Mobile Commerce

M-Commerce vs. E-Commerce

in the broader sense:

Mobile Business vs. E-Business Electronic Commerce:

in the narrower sense:

buying selling marketing and servicing of products or services over computer networks electronic commerce made through mobile devices

Mobile Commerce:

Market Overview

Mobile users: 1.48 billions (German: Milliarden)

double the users of the year 2000 more than fixed subscribers (1.18 bn) essential growth in China, India and Russia China: 310 millions of mobile users

Compare: population of USA: 293027571 (July '04)

Revenues of approx. CHF 488 bn (CHF 330.-/person) 102 users with broadband internet

Internet Users: 699 millions

Source: TagesAnzeiger, Newsticker, 9.12.04 17:21

Content Creation

What type of content should be provided?

Text Audio Graphics Video

SMS-news-service MP3-download MMS-weather-service video conference, movie-download

Benefits of these digital medias:

modifiable repetitively consumable by the same user & by others fast and cheap to reproduce

Content Creation

Issues

Interactivity Customization Time-dependency

Real-time brokerage service Translation service

Intensity of use Operational format Pricing Externalities

Who else could benefit?

Content Packaging

Aggregating and transforming information for distribution E.g. sports, games, finance, entertainment, news, shopping, travel Customized time- and location-sensitive planning

yellowbrix.com

Market Making

B2C: Mobile Portals

Content & Services

Communication Personalized content: alerts, news, stocks, betting Personal Information Management (PIM); Filofax Location specific information Webpage vs. Mobile-Page

Issues

~25 Links/page vs. ~5Links/page

Market Making

But who develops portals?

Mobile operators

Strong position

Vodafone live Debitel SonyEricsson Nokia Yahoo AOL Excite

Virtual operators

Technology vendors

Traditional Web-Portals

others...

Customer Segments

B2C

Solutions

B2B

Sales driven

Mobile Workforce Mobile CRM Mobile SCM

Manufacturing, banks Consultancies, system houses Taxi, courier

Service driven

Logistics driven

Mobile transactions

Teens ( 18 years) Mobile Entertainment Students (18 25 years) Mobile Information Young business people (25 36 years) Mobile Communication

Mobile Services Overview

Key improvements

Location specific information Personalization Immediacy Service availability M-Messaging M-Advertising M-Emergency-Services M-Tailing M-Finance M-Payment M-Information E-Mail, SMS, Instant Messaging Sponsored Alerts, Mobile Promotion Child Tracking Ticketing, Reservation M-Brokerage, M-Banking M-Cash Traffic, News

High Potential Services

Pricing

Pricing by time

Phone call GPRS iMode (DoCoMo) sunrise myzone

Pricing by data volume

Pricing by Service

Pricing by location

Payment

Mobile operators who allow to charge to the telephone bill Some banks come with their own solutions Visa, Barclays Banks etc. are experimenting

Visa Cash-Smartcard

PrePaid-Solutions

load with Credit Cards

Timetable

Mobile Technology Mobile Market Forecast into 4th Generation

Anytime, Anywhere, Anything

4G WIRELESS DEVICES

Content

The 4G- Issues

Problems Open Questions Introduction Anything Goes Big Brother Pocket Computing

The Scenarios

The Outlook

The 4G-Issues

Support of global roaming across multiple wireless and mobile networks

Single device, single bill, overall access IP- Interoperability and bitrates of 50 Mbps and more...

Network architectures QoS

Handoff delay End-to-End- QoS

Design 4G as previous systems just with more bandwidth? Mixture of a variety of infrastructures

The 4G-Issues
Possible Architectures:
Multimode devices

The 4G-Issues
Possible Architectures:
Overlay network

The 4G-Issues
Possible Architectures:
Common access protocol

Scenarios

Intro

First, an overview of the whole technological, political and economical system in 2010 is given. This offers a bird's eye view of technological systems, regulations and general development. Second, a scene in telecommunication business is depicted. Here the aim is to show what kind of issues that are relevant to the business actors. (B2B) Third, the life of an ordinary citizen is described. (B2C)

Scenario aim: to create an awareness of which future developments are possible

Anything goes
Society and technological development

Generic HW Problems are solved trough SW adaptations Terminals, or access tools

capable of using several different types of wireless networks to access the demanded services. groups of small firms or housing estates

small niche operators offering fairly local wireless networks, aiming at

most large corporations have their own wireless LANs at their facilities. many consumers decided to use miniature wireless LANs to cover their homes or their workplaces at home. terminals capable of operating with many network infrastructures, services that adapt the man machine interface (MMI) based on what type of access node is being used, etc.

Anything goes
Inside telecommunication business

Selling a new communication tool to a small telecommunication operator Mr. Anders

Everyday life

Has WLAN Tool for home Wants interactive sleeping device an opaque and transparent virtual image, a virtual desk and keyboard, integrated microphone and earphones using speech recognition.

Virtual Vision glasses

Anything goes

Globalization

World wide communication Main product is software Companies to sell products globally De-facto-Standardization takes over

Standardization

Appliances communicate among each other

Big Brother
Essence of scenario

Market is limited and controlled by political authorities Personal Integrity is no.1 priority in all systems, Global security control performed by international governmental organizations. Limited markets. Low development rate. Very few operators.

Big Brother
Society and technology development

Security of the individual was threatened Buy information from traders(companies specialized in collectig information and selling it Authorities had to act:

Govs hat strong legislative control by 2009 over comm resources (frequency bands and encryption)

Computer security was not made safe New security standards were made Companies split into decentralized divisions working with authorities in each country

Big Brother
Inside telecommunication business

Telecommunication operator and telecommunication manufacturer New base stations for a network shall be bought standards haven't changed, so no change in base- stations Programming interfaces as a topic Demand for mobile data communication is fairly stable UMTS as a standard to handle most of the requirements

Big Brother
The everyday life and private sphere

Mr. Anders at home:

Printing a registered copy of the daily newspaper Not revealing personal interests

ID-Card for all sorts of payment and identification Mr. Anders at work:

Sending mail

Governmental restrictions made many information providers vanish Yet very personal information can be available to government organs

ID- Cards

Government restricts private sphere by restricting media content being shown on, for example, restricting pay-per view TV

Big Brother

Information trading

Potential risks At some point degeneration and sensitive information can be available Access to sensitive information becomes to easy Decreased

Globalization

Authorities limit cross-border communication

Standardization is increased New integrity and encryption policy

Pocket Computing
Essence of Scenario

Market is developed and controlled by operators Social and political differences Bandwidth still expensive Highly differentiated service and pricing levels Specialized service providers also provide equipment for specialized purpose Global multi-purpose services compete with local specialized services

Pocket Computing
Society and technological development

Technological background:

IMT-2000 Universal mobile idea never to reach the expectations Large variety of different mobile solutions are available The different wireless networks compliment each other, but multimode solution is relatively expensive. Common people prefer to pay for reduced services at minimum price. Hidden communication (cars, household appliances, etc...) Products are marketed worldwide Importance of culture in economical issues increases

Economical Background:

Pocket Computing
Inside telecommunication business

Small companies competing locally and end up by being bought by larger companies A merge is being discussed

Increasing WLAN use Idea of a non-cellular mobile phone/data network

Extending the network world wide Getting political influence Focus on business customers

Trough reliable and fast access

Pocket Computing
Everyday-life and private sphere

The Businessman

World wide clients Internationally traveling Notebook always connected to the company

Multi-mode phone modem Reliable and fast access

Premium prices

The new middle class

New generation user Different services at different quality levels are being offered

Pocket Computing

Standardization

Ruled by big operators

Development of Communicating Appliances is slow

The Outlook

Technology development Social Structures Current Infrastructures vs. 4G Infrastructures Open Questions

Discussion
Mobile Commerce

Differences:

E-Commerce vs. M-Commerce

e-commerce with computer = m-commerce with mobilephones?

m-commerce will not only expand its share of this [ecommerce-]market, but will expand the market overall, through the rapid uptake of m-commerce services Why? How will it expand the market? Europe? USA? Japan?

Key trends are from

Which Market is growing the fastest and why?

Europe? Asian-Pacific-Region? Thus, we believe that Europe and Asia will be at the forefront of the development in m-commerce and about 2 years ahead of the US.

Durlacher Research 2000 Frequency band? GSM? UMTS?

Technical Standard

What could be the 4G Implications on everyday life?

Where does privacy begin?

Will there be any private life?

Are there any secure personal data? Work at home: relief or isolation? How big is the willingness to pay premium prices for higher data-rates?

What Devices/Applications could be useful and in which environment?

Virtual Vision Glasses for:

Work at home, shopping, driving, conferencing Wake up service, Household- maintenance, shopping advice, ...

Intelligent Home Agents (Applications) for:

Is there any Killerapplication?

The initial killer application for mobile internet services will be e-mail based on the current success of SMS (Short Message Service), which is necessary to pave the way for more transactional m-commerce services.

Durlacher Research 2000 Has it become true?

Will Instant Messaging be the killer-application? or Audio/Video-Download

Mobilephone as MP3-Player? Mobilephone as Video-Player?

or Mobile Banking?

Addendum
more about M-Commerce

Pricing Schemes

Transmission Speeds

Hype or Reality?

Prediction of Speeds in 4G
Major Requirement Driving Architecture Network Architecture 3G (including 2.5G) 4G Voice driven; data was always add- Converged data and voice over IP on Wide Area Cell- Based 384 Kbps to 2 Kbps 1800- 2400 Mhz 5- 20 Mhz W- CDMA; 1xRTT; Edge Hybrid - Integration of Wireless LAN (WiFi, Bluetooth) and wide area 20 to 100 Mbps in mobile mode Higher frequency bands (2-8 GHz) 100 MHz (or more) All digital with packetized voice OFDM and MC-CDMA (Multi Carrier CDMA) Concatenated coding scheme Smarter Antennas, software multiband and wideband radios All IP (IP6.0)

Speeds Frequency Band Bandwidth

Switching Design Basis Circuit and Packet Access Technologies

Convolutional Rate 1/2, 1/3 Forward Error Connectio Component Design IP Optimized antenna design, multiband adapters Air link protocols incl.IPv5.0

References

wikipedia.org m-lehrstuhl.de tagesanzeiger.ch Mobile Commerce UMTS Report

Report, Durlacher Research Ltd, www.durlacher.com

An Investment Perspective, Durlacher Research Ltd, www.durlacher.com