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Mobile Commerce
New Opportunities for B2B and B2C Services Offered by New Mobile Communication Technologies
Dane Marjanovic • Christoph Müller • Thomas Schönenberger
Timetable
Mobile Technology
Mobile Market
Forecast into 4th Generation
A short history ofmobile 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 11’000 users
● In 1972 an new net was established– 1986 the network was working to full capacity of 27’000
A short history ofmobile communication
● 1986 the third analog network was established● The limitation was by 400’000 costumers in
Germany ● 31.12.1999 Swisscom stops the network
A short history ofmobile communication
● In 1982 the European Conference of Postal and Telecommunications Administrations founded a working group.
● 1987 the Global System for Mobile communicationsstandard 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
● GPRS stands for General Packet Radio Services– It has different service classes and the user is
always online
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
– Windows CE is a variation of Microsoft's Windows● real-time operating system● runs also under Smartphone under or the Sega Dreamcast
– 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
– in the narrower sense:● Electronic Commerce:
– buying– selling– marketing and– servicing
of products or services over computer networks● Mobile Commerce:
– electronic commerce made through mobile devices
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: 293“027‘571 (July '04)
– Revenues of approx. CHF 488 bn (CHF 330.-/person)
● Internet Users: 699 millions– 102 users with broadband internet
Source: TagesAnzeiger, Newsticker, 9.12.04 17:21
Content Creation What type of contentshould be provided?
● Text SMS-news-service● Audio MP3-download● Graphics MMS-weather-service● Video video conference, movie-download
Benefits of these digital medias:– modifiable– repetitively consumable by the same user & by others– fast and cheap to reproduce
Content CreationIssues● 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 MakingB2C: Mobile Portals
● Content & Services– Communication– Personalized content: alerts, news, stocks, betting– Personal Information Management (PIM); Filofax– Location specific information
● Issues– Webpage vs. Mobile-Page
● ~25 Links/page vs. ~5Links/page
Market MakingBut who develops portals?● Mobile operators
– Vodafone live● Virtual operators
– Debitel● Technology vendors
– SonyEricsson– Nokia
● Traditional Web-Portals– Yahoo– AOL– Excite
● others...
Strong position
Customer Segments
● B2C Solutions– Teens (≤ 18 years) Mobile Entertainment
– Students (18 – 25 years) Mobile Information
– Young business people (25 – 36 years) Mobile Communication
● B2B– Sales driven Mobile Workforce
● Manufacturing, banks– Service driven Mobile CRM
● Consultancies, system houses– Logistics driven Mobile SCM
● Taxi, courier
Mob
ile tr
ansa
ctio
ns
Mobile Services Overview● Key improvements
– Location specific information– Personalization– Immediacy– Service availability
● High Potential Services– M-Messaging E-Mail, SMS, Instant Messaging– M-Advertising Sponsored Alerts, Mobile Promotion– M-Emergency-Services Child Tracking– M-Tailing Ticketing, Reservation– M-Finance M-Brokerage, M-Banking– M-Payment M-Cash– M-Information Traffic, News
Pricing
● Pricing by time– Phone call
● Pricing by data volume– GPRS
● Pricing by Service– iMode (DoCoMo)
● Pricing by location– sunrise myzone
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, Anything4G WIRELESS DEVICES
Content● The 4G- Issues
– Problems– Open Questions
● The Scenarios– Introduction– Anything Goes– Big Brother – Pocket Computing
● 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 goesSociety 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.
● small niche operators offering fairly local wireless networks, aiming at– groups of small firms or housing estates
● 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 goesInside telecommunication business● Selling a new communication tool to a small
telecommunication operator
Everyday life● Mr. Anders
– Has WLAN Tool for home
– Wants interactive sleeping device
● Virtual Vision glasses– an opaque and transparent virtual image, a virtual desk and
keyboard, integrated microphone and earphones using speech recognition.
Anything goes
● Globalization– World wide communication– Main product is software– Companies to sell products globally
● Standardization– De-facto-Standardization takes over
● 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 BrotherSociety 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 BrotherInside 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 BrotherThe 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
● Globalization– Decreased
● 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 ComputingSociety 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 multi-
mode solution is relatively expensive. Common people prefer to pay for reduced services at minimum price.
– Hidden communication (cars, household appliances, etc...)
● Economical Background:– Products are marketed worldwide– Importance of culture in economical issues increases
Pocket ComputingInside 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 ComputingEveryday-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 withmobilephones?
– m-commerce will not only expand its share of this [e-commerce-]market, but will expand the market overall, through the rapid uptake of m-commerce services
– Why? How will it expand the market?
● Key trends are from– Europe?– USA?– Japan?
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-commerceand about 2 years ahead of the US.
– Durlacher Research 2000● Technical Standard
– Frequency band?– GSM?– UMTS?
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 beuseful and in which environment?
● Virtual Vision Glasses for:– Work at home, shopping, driving, conferencing
● Intelligent Home Agents (Applications) for:– Wake up service, Household- maintenance, shopping
advice, ...
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 SpeedsHype or Reality?
Prediction of Speeds in 4G3G (including 2.5G) 4G
Converged data and voice over IP
Network Architecture Wide Area Cell- Based
Speeds 384 Kbps to 2 Kbps 20 to 100 Mbps in mobile mode
Frequency Band 1800- 2400 Mhz Higher frequency bands (2-8 GHz)
Bandwidth 5- 20 Mhz 100 MHz (or more)
Switching Design Basis Circuit and Packet All digital with packetized voice
Access Technologies W- CDMA; 1xRTT; Edge
Forward Error ConnectioConvolutional Rate 1/2, 1/3 Concatenated coding scheme
Component Design
IP Air link protocols incl.IPv5.0 All IP (IP6.0)
Major Requirement Driving Architecture
Voice driven; data was always add-on
Hybrid - Integration of Wireless LAN (WiFi, Bluetooth) and wide area
OFDM and MC-CDMA (Multi Carrier CDMA)
Optimized antenna design, multi- band adapters
Smarter Antennas, software multiband and wideband radios
References
● wikipedia.org● m-lehrstuhl.de● tagesanzeiger.ch● Mobile Commerce
Report, Durlacher Research Ltd, www.durlacher.com
● UMTS ReportAn Investment Perspective, Durlacher Research Ltd, www.durlacher.com
