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

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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