Evolving Global Mobile Commerce: Strategies, Trends and Opportunities

This publication has been discontinued on July 19, 2011.

Introduction

TABLE OF CONTENTS

WHAT IS MOBILE COMMERCE 13

INDUSTRY OVERVIEW 15

ECONOMICS OF TRANSACTIONS 17

• TRANSACTION COSTS 17
  • Storage media costs 18
• PERFECT TRANSACTION 19

OPPORTUNITIES 20

• OTHER OPPORTUNITIES 25
  • Mobile Retailers 25
  • Mobile Portals 25
  • Credit card companies 26

CURRENT MOBILE COMMERCE MARKET 28

• MOBILE COMMERCE DRIVERS 28
  • Location independence 28
  • Ease of Use 28
  • Location specific services 29
  • Personalization 30
  • New opportunities for collaboration 30
  • Emergence of common standards 35
  • Growth in Internet usage 35
  • Growth in transaction over fixed Internet 38
  • Accessibility to the mobile Internet 38
  • Value proposition of service providers 39
  • Technology advance 40
• INHIBITORS OF MOBILE COMMERCE 40
  • Size of the mobile device screen 40
  • Bandwidth and transmission speeds 41
  • Limited storage capacity 41
  • Mobile Internet specific content 42
  • Conflicting standards 42
  • Limited battery life 42
  • Mobile tariff rates 44
  • Limited CPU capacity 45
  • Multitude of devices 45
  • Security 46

KEY TECHNOLOGY DRIVERS OF MOBILE COMMERCE 48

• COMMUNICATION TECHNOLOGIES 48
• LOCATION SPECIFIC TECHNOLOGIES 49
• BLUETOOTH 51
• SPEECH RECOGNITION TECHNOLOGY 52
• PERSONALISATION 52
• SYNCHRONIZATION 55
• XML 55
• WML 55
• PKI 55
• SIM APPLICATION TOOLKIT 56

MOBILE INTERNET SUPPLY CHAIN 58

• Mobile Internet Transaction chain 59
• KEY PLAYERS IN THE MOBILE INTERNET SUPPLY CHAIN 59
• Technology vendors 59
• Infrastructure equipment providers 61
• Application platform developers 62
• Application developers 62
• Content creators and aggregators 66
• Financial service providers 68
• Mobile portals 69
• Wireless internet service providers 69
• Handset manufacturers 71

KEY APPLICATIONS OF THE FUTURE 73

TECHNOLOGIES 80

• BEARER NETWORK TECHNOLOGIES 80
• AMPS 81
• GSM 81
• TDMA 82
• CDMA 82
• HSCSD 83
• GPRS 83
• UMTS / 3G 84
• EDGE 85
  • Technology classification 85
  • Subscribers by technology 86
• BEARER NETWORK TECHNOLOGIES IN THE US 87
• BEARER NETWORK TECHNOLOGIES IN EUROPE 88
• CONVERGENCE 88
• IMPACT ON CONSUMERS 89
  • Satellite Mobile Communications Service 89
• COMMUNICATION TECHNOLOGIES 93
• SMS 93
  • Cell Broadcast 96
  • Sim Application Toolkit 97
• ENABLING TECHNOLOGIES 98
• WAP 98
• WAP MODEL 101
• I-MODE 102

I-MODE SUBSCRIBER GROWTH 102

• TECHNOLOGY 103
• REVENUE 104
• SERVICES 105
• MAIL 105
• INTELLIGENT TRAFFIC GUIDANCE SYSTEM 105
• EMERGENCY ELECTROCARDIOGRAM TRANSMISSION SYSTEM 105
• EMERGENCY VEHICLE SUPPORT SYSTEM 105
• INFORMATION DIAL 106
• MOBILE Q SERVICE 106
• SHORT MAIL SERVICE 106
• SERVICES 106
• SUPPORT FOR JAVA PROGRAMMING LANGUAGE 107

MOBILE COMPUTING 111

LOCATION SPECIFIC SERVICES 113

• LOCATION SPECIFIC TECHNOLOGIES 114
  • Location Determination Technologies 114
  • Location based customization technologies 115
  • Location specific applications 115
• MOBILE LOCATION SPECIFIC SERVICES 115
• LOCATION SPECIFIC SERVICES DRIVERS 115
• INHIBITORS OF LOCATION SPECIFIC SERVICES 116
• CORPORATE SERVICES 116
• REVENUE MODELS 117
  • Subscriptions 117
  • Airtime charges 117
  • Mobile commerce 118
  • Advertising 118
  • Benefits to the customer 118
  • Benefits to the service provider 119
  • Benefits to the network service provider 119

FINANCIAL SERVICES INDUSTRY 120

• CHARACTERISTICS OF THE GLOBAL FINANCIAL SERVICES INDUSTRY 122
  • Changes in industry structure 122
  • New organization structures 123
  • Outsourcing of services 124
  • Ubiquity and Mobility 124
• CLASSIFICATION OF THE US FINANCIAL SERVICES INDUSTRY 128
  • Depository institutions 128
  • Non-depository institutions 128
  • Insurance companies 128
  • Finance companies 128
• UNITED STATES BANKING REGULATORY SYSTEM 129
• FDIC 130
  • Federal Reserve Board 131
• OCC 132
• OTS 133
  • National Credit Union Administration 133
  • State Regulatory Authorities 133
• FORCES OF CHANGE IN THE BANKING INDUSTRY 133
  • Deregulation 133
  • Legal issues 134
  • Gramm-Leach-Bliley Act 135
  • Mergers and acquisitions 135
  • Threat from firms in other industries 136
  • Globalization 137
  • foreign competition 139
  • Innovative products/services 140
  • Information Technology 141
  • New distribution channels 144
  • Cyber finance 150
• IMPACT OF INTERNET ON FINANCIAL SERVICES 150
  • Reach and speed 151
  • Cost 151
  • Interactivity 152
  • Security of transactions 152
  • Anonymity 155
  • Flexibility 156
• TOP 10 US BANKS 156
  • Insured US-Chartered Commercial banks Ranked by Consolidated Assets (September 2000) 156
• IMPACT OF INTERNET ON BANKING 157

MOBILE FINANCIAL SERVICES 158

FINANCIAL SERVICES AS A DRIVER OF GROWTH 161

MOBILE BANKING 163

• MOBILE RETAIL BANKING 163
  • Mobile retail banking transaction/Information chain 163
  • Mobile banking drivers 164
  • Inhibitors of mobile banking 164
• MOBILE RETAIL BANKING SERVICES 164
  • Transactions 164
  • Information 164
  • Mobile banking systems (pull vs push) 165
  • Mobile banking transaction trends 165
  • The competitive scenario 166
  • Changing industry structure 167
  • Security 168
  • Benefits to the customer 169
  • Benefits to the bank 170
  • Benefits to the network service provider 170
  • Revenue models 170
• MOBILE INVESTMENT BANKING SERVICES 171
• MOBILE BANKING TRANSACTION 172
• WIRELESS APPLICATION SERVICE PROVIDERS 172
  • Revenue model 174
  • WASP's market drivers 175
  • Challenges 175

MOBILE BANKING TRANSACTION THROUGH A WASP 177

• MOBILE RETAIL BANKING SERVICES STRATEGIES 177
• INTEGRATE MOBILE COMMERCE STRATEGY WITH THE OVERALL BANKING STRATEGY 178
• BUILD AND RETAIN CUSTOMER BASE 178
• REVENUE GENERATION 178
• OFFER PERSONALIZED SERVICES 179
• ENTER INTO NEW BUSINESS PARTNERSHIPS 179
• COMPLEMENT EXISTING CHANNELS 183
• LEVERAGE ON CROSS SELL OPPORTUNITY 183
• OFFER A SECURE MODE OF TRANSACTION 183
• PRODUCTS AND SERVICES 184
• VENDOR MANAGEMENT 184

INTERNET BASED BROKERAGES 185

• USE OF INTERNET BY BROKERAGE INDUSTRY CONSTITUENTS 189
  • Financial Service Providers 189
  • Investors 190
  • Issuers 190

MOBILE BROKERAGE 192

• INNOVATIVE SERVICES AND PROMOTIONS 192
• MOBILE BROKERAGE TRANSACTION/INFORMATION CHAIN 193
• MOBILE BROKERAGE SERVICES 194
  • Transactions 194
  • Information 194
• MOBILE BROKERAGE TRANSACTION 195
• (I THINK YOU HAVE MISREAD THE WEB SERVER AS WAP SERVER) 195
• MOBILE BROKERAGE TRANSACTION TRENDS 195

MOBILE RETAILING 198

• MOBILE RETAILING TRANSACTION CHAIN 200
• MOBILE RETAILING SERVICES 200
  • Transactions 201
• MOBILE RETAILING DRIVERS 201
• INHIBITORS OF MOBILE RETAILING 201
• MICROPURCHASES 201
• BENEFITS TO THE CUSTOMER 201

BENEFITS TO THE RETAILER 202

• BENEFITS TO THE NETWORK SERVICE PROVIDER 202
• REVENUE MODELS 202
• MOBILE ENTERTAINMENT 202
• MOBILE ENTERTAINMENT TRANSACTION CHAIN 204
• MOBILE ENTERTAINMENT SERVICES 204
  • Games 204
  • Mobile Music 204
  • Mobile radio 206
  • Challenges 208
  • Still pictures 208
  • Mobile Video 209
• MOBILE ENTERTAINMENT DRIVERS 211
• INHIBITORS OF MOBILE ENTERTAINMENT 211
• BENEFITS TO THE CUSTOMER 211
• BENEFITS TO THE CONTENT PROVIDER 211
• BENEFITS TO THE NETWORK SERVICE PROVIDER 211
• TECHNOLOGY PROTOCOLS 212
• REVENUE MODELS 212

MOBILE COMMERCE SECURITY 214

• MOBILE COMMERCE SECURITY OVERVIEW 214
  • WAP gateway 215
  • Application level security 215
  • Scalable 215
  • Securing Wireless Transactions 216
• ENCRYPTION TECHNOLOGIES 216
  • Symmetric (secret key cryptography) 216
  • Asymmetric (public/private key cryptography) 217
• MESSAGE AUTHENTICATION 219
• SECURITY STRATEGIES 220
  • Periodic review 221
  • Outsourcing vs In-house 221
  • Regional considerations 222
  • Legal Requirements 222
  • Internal Controls and Audit 227
  • Consider the various technology options 227
• RADICCHIO 228

MOBILE COMMERCE PRIVACY 230

CREDIT CARDS 231

• CREDIT CARD INDUSTRY OVERVIEW 231
• CHARACTERISTICS OF THE CREDIT CARD INDUSTRY 234
  • Retail transactions over the internet 234
  • Marketing costs 235
  • Industry Transformation 236
  • New entrants 237
  • First movers 237
  • Risk 237
• TRENDS IN THE CREDIT CARD INDUSTRY 238
  • Innovations 238
  • Card Solicitations 238
  • Market share 238
  • Installment Debt 238
  • Margins 239
  • Consumer Credit Debt 239
  • Differentiation 239
  • Charge-Offs 239
• CREDIT CARD TRANSACTION 239
  • Purchasing over the Internet 240
• GOALS OF CREDIT CARD MARKETER 242
  • Generate Return on Invest on marketing efforts 242
  • Assessment of credit risk 243
  • Differentiation 244
• SMART CARD 246

SMART CARD TRANSACTION CHAIN 246

• FUNCTIONALITIES 247
  • Read only 247
  • Write 247
  • Modify 247
  • Delete 247
  • Access restricted 247
  • Processing 248
• TYPES OF CARDS 248
  • Based on functionalities 248
  • Based on usage 248
• JAVA CARD 248
• BROAD APPLICATIONS 249
  • Transactions 249
  • Access control 249
  • Information Storage 252
  • Marketing 252
• SPECIFIC APPLICATIONS 252
  • Electronic Money 253
  • Electronic Purse/Wallet 253
  • GSM Cards 254
  • Phone Cards 256
  • User identification 257
  • Bank Card 257
  • Loyalty Point Card 258
  • Health Card 258
  • Transport Card 258
  • Pay TV Card 259
  • Electronic Toll 259
  • Meter Card 260
  • Airline Card 260
  • Hotel Card 260
  • Voting 261
• SMART CARD SHIPMENTS BY SECTOR 261
• SOURCE: EUROPEAN SMART CARD INDUSTRY ASSOCIATION 261
• STRENGTHS OF SMART CARDS 261
  • Convenience 261
  • Security 261
  • Privacy 262
  • Reduction of Costs 262
  • Customized information 263
• WEAKNESSES OF SMART CARDS 263
  • Loss of card 263
  • Loss of data 263
  • Customer confidence 263
  • Lack of a common Operating Standard 263
  • Investments 264
• FUTURE OF SMART CARDS 264

DIGITAL CASH 266

• OPPORTUNITIES 268
• COMPONENTS OF DIGITAL CASH TRANSACTION 268
  • Account Setup 268
  • Purchase 269
  • Authentication 269
• DIGITAL CASH INDUSTRY ANALYSIS 269
  • Capacity 270
  • Switching Cost 271
  • Diversity and Balance of Competitors 272
  • New Entrants 272
  • Proprietary Product Differences 273
  • Capital Requirements 273
  • Brand Identity 273
  • Access to Key Partners 273
  • Government Policy 273
  • Network Externalities 274
  • Exit Barriers 274
• KEY PARTNERS IN THE DIGITAL CASH INDUSTRY 275
  • Banking/Non-Banking financial institutions 275
  • Brokerages 276
  • Technology Companies 276
  • Access Providers 277
  • Telecommunications Companies 277
• MICROPAYMENTS 277
  • Publishing 279
  • Music/Video 279
  • Software Programming 279
  • Promotions 279
• BENEFECIARIES OF DIGITAL CASH 280
• CUSTOMER ISSUES 283
• BUSINESS ISSUES 284
• BUSINESS AND CUSTOMER CONCERNS 285
• ISSUES FOR FINANCIAL INSTITUTIONS 286
  • Confidence 286
  • Security 289
  • Authentication 289
  • Privacy 290
• GOVERNMENTAL ISSUES 290
  • Stability of financial markets 291
  • Consumer protections 292
  • Effective, low-risk, low-cost, and convenient payment and financial services for consumers and businesses 294
  • Money Supply 294
  • Criminal Activity 295
• ADVANTAGES OF DIGITAL CASH 295
• LIMITATIONS OF DIGITAL CASH 296
• FUTURE OF DIGITAL CASH 298

PAYMENT SCHEMES 301

• TYPES OF PAYMENT SCHEMES 301
  • Credit card payment schemes 301
  • Non-credit card payment schemes 302
• EVALUATION OF PAYMENT SCHEMES 303
  • SSL Credit Card 303
  • SET Credit Card 304
  • Digital Check 304
  • Store-valued Smart Card 304
• MICROPAYMENT SECURITY 305
• WHY WIRELESS MICROPAYMENTS 305
  • Computational resources 306
  • Weaker graphical interface 307
  • Weaker input capabilities 307
  • Weaker Internal / External Security 308
• DIFFERENT MICROPAYMENT SCHEMES 309
  • Advantages and disadvantages 311

WIRELESS INDUSTRY ASSOCIATIONS 316

• CELLULAR TELECOMMUNICATIONS & INTERNET ASSOCIATION (CTIA) (WWW.CTIA.ORG) 316
• CDMA DEVELOPMENT GROUP (WWW.CDG.ORG) 317
• EUROPEAN TELECOMMUNICATIONS STANDARDS INSTITUTE (ETSI) (WWW.ETSI.ORG) 320
• GSM ASSOCIATION (WWW.GSMWORLD.ORG) 323
• INTERNET SOCIETY INTERNATIONAL SECRETARIAT (WWW.ISOC.ORG) 326
• TELECOMMUNICATIONS INDUSTRY ASSOCIATION (WWW.TIAONLINE.ORG) 327
• SMART CARD FORUM (WWW.SMARTCARDFORUM.ORG) 329
• UMTS FORUM (WWW.UMTS-FORUM.ORG) 331
• INTERNATIONAL TELECOMMUNICATION UNION (WWW.ITU.ORG) 332

CONCLUSION 333

PROFILE OF KEY PLAYERS IN THE GLOBAL WIRELESS INDUSTRY 341

• 2 ROAM (WWW.2ROAM.COM) 342
  • Introduction 342
  • Revenue model 342
  • Customers & Partners 342
  • Products and services 342
• 724 SOLUTIONS (WWW.724SOLUTIONS.COM) 344
  • Introduction 344
  • Revenue model 345
  • Customers & Partners 345
  • Products and services 345
• @HAND (WWW.@HAND.COM) 346
  • Introduction 346
  • Revenue model 346
  • Customers & Partners 346
  • Products and services 346
• ADVERTISING.COM INC. (WWW.ADVERTISING.COM) 348
  • Introduction 348
  • Revenue model 348
  • Customers & Partners 349
  • Products and services 349
  • Introduction 350
  • Revenue model 350
  • Customers & Partners 350
  • Products and services 351
• AIRFLASH (WWW.AIRFLASH.COM) 352
  • Introduction 352
  • Revenue model 352
  • Customers & Partners 352
  • Products and services 353
• AIR2WEB (WWW.AIR2WEB.COM) 354
  • Introduction 354
  • Revenue model 354
  • Customers & Partners 354
  • Products and services 354
• ASPIRO (WWW.ASPIRO.COM) 355
  • Introduction 355
  • Customers & Partners 355
  • Products and services 355
• AVANTGO (WWW.AVANTGO.COM) 356
  • Introduction 356
  • Revenue model 356
  • Customers & Partners 356
  • Products and services 357
• BRIGHTPOD (WWW.BRIGHTPOD.COM) 359
  • Introduction 359
  • Revenue model 359
  • Customers & Partners 359
  • Products and services 360
• BROKAT (WWW.BROKAT.COM) 361
  • Introduction 361
  • Revenue model 361
  • Customers & Partners 362
  • Products and services 362
• CELLPOINT (WWW.CELLPOINT.COM) 364
  • Introduction 364
  • Revenue model 364
  • Customers & Partners 365
  • Products and services 365
• CERTICOM (WWW.CERTICOM.COM) 367
  • Introduction 367
  • Revenue model 367
  • Customers & Partners 367
  • Products and services 368
• DIVERSINET (WWW.DVNET.COM) 369
  • Introduction 369
  • Revenue model 369
  • Customers & Partners 369
  • Products and services 369
• EVERYPATH (WWW.EVERYPATH.COM) 371
  • Introduction 371
  • Revenue model 371
  • Customers & Partners 371
  • Products and services 372
• FUNGE SYSTEMS INC. (WWW.FUNGESYSTEMS.COM) 373
  • Introduction 373
  • Customers & Partners 373
  • Products and services 373
• GENIE (WWW.GENIE.CO.UK) 375
  • Introduction 375
  • Revenue model 375
  • Customers & Partners 375
  • Products and services 376
• GO2 SYSTEMS (WWW.GO2ONLINE.COM) 377
  • Introduction 377
  • Revenue model 377
  • Customers & Partners 377
  • Products and services 378
• GOAMERICA (WWW.GOAMERICA.COM) 379
  • Introduction 379
  • Revenue model 379
  • Customers & Partners 379
  • Products and services 380
• HANDSPRING (WWW.HANDSPRING.COM) 381
  • Introduction 381
  • Revenue model 381
  • Customers & Partners 381
  • Products and services 381
• HOTPALM (WWW.HOTPALM.COM) 384
  • Introduction 384
  • Revenue model 384
  • Customers & Partners 384
  • Products and services 384
• I3MOBILE (WWW.I3MOBILE.COM) 386
  • Introduction 386
  • Revenue model 386
  • Customers & Partners 386
  • Products and services 386
• INFOSPACE (WWW.INFOSPACE.COM) 388
  • Introduction 388
  • Revenue model 389
  • Customers & Partners 389
  • Products and services 389
• JP MOBILE (WWW.JPMOBILE.COM) 393
  • Introduction 393
  • Revenue model 393
  • Customers & Partners 393
  • Products and services 393
• LIGHTSURF TECHNOLOGIES (WWW.LIGHTSURF.COM) 395
  • Introduction 395
  • Revenue model 395
  • Customers & Partners 395
  • Products and services 395
• LOGICA (WWW.LOGICA.COM) 397
  • Introduction 397
  • Revenue model 397
  • Customers & Partners 397
  • Products and services 397
• MOBILEQ (WWW.MOBILEQ.COM) 399
  • Introduction 399
  • Revenue model 399
  • Customers & Partners 399
  • Products and services 399
• MOBILEUM (WWW.MOBILEUM.COM) 401
  • Introduction 401
  • Revenue model 401
  • Customers & Partners 401
  • Products and services 401
• MULTICHART (WWW.MULTICHART.COM) 403
  • Introduction 403
  • Revenue model 403
  • Customers & Partners 403
  • Products and services 403
• NEOMAR (WWW.NEOMAR.COM) 405
  • Introduction 405
  • Revenue model 405
  • Customers & Partners 405
  • Products and services 405
• NETPACE (WWW.NETPACE.COM) 407
  • Introduction 407
  • Revenue model 407
  • Customers & Partners 407
  • Products and services 407
• NUANCE COMMUNICATIONS INC. (WWW.NUANCE.COM) 410
  • Introduction 410
  • Revenue model 410
  • Customers & Partners 410
  • Products and services 410
• OMNISKY (WWW.OMNISKY.COM) 413
  • Introduction 413
  • Revenue model 414
  • Customers & Partners 414
  • Products and services 414
• OPENWAVE SYSTEMS (WWW.OPENWAVE.COM) 417
  • Introduction 417
  • Revenue model 418
  • Customers & Partners 418
  • Products and services 418
• ORACLE MOBILE (WWW.ORACLEMOBILE.COM) 420
  • Introduction 420
  • Revenue model 420
  • Customers & Partners 420
  • Products and services 420
• PACKETVIDEO (WWW.PACKETVIDEO.COM) 421
  • Introduction 421
  • Revenue model 421
  • Customers & Partners 421
  • Products and services 421
• PALM (WWW.PALM.COM) 423
  • Introduction 423
  • Revenue model 423
  • Customers & Partners 424
  • Products and services 424
• PUMATECH (WWW.PUMATECH.COM) 427
  • Introduction 427
  • Revenue model 427
  • Customers & Partners 427
  • Products and services 427
• RESEARCH IN MOTION (WWW.RIM.NET.COM) 431
  • Introduction 431
  • Revenue model 431
  • Customers & Partners 431
  • Products and services 431
• ROOM 33 (WWW.ROOM33.COM) 433
  • Introduction 433
  • Revenue model 433
  • Customers & Partners 433
  • Products and services 433
• SEMOTUS (WWW.SEMOTUS.COM) 434
  • Introduction 434
  • Revenue model 434
  • Customers & Partners 434
  • Products and services 435
• SENSCOM INC. (WWW.SENSCOM.COM) 439
  • Introduction 439
  • Revenue model 439
  • Customers & Partners 440
  • Products and services 440
• SIGNALSOFT CORP. (WWW.SIGNALSOFT.COM) 442
  • Introduction 442
  • Revenue model 442
  • Customers & Partners 442
  • Products and services 442
• SNAPTRACK (WWW.SNAPTRACK.COM) 444
  • Introduction 444
  • Revenue model 444
  • Customers & Partners 444
  • Products and services 444
• SPEEDIA (WWW.SPEEDIA.COM) 446
  • Introduction 446
  • Revenue model 446
  • Customers & Partners 446
  • Products and services 446
• THINAIRAPPS (WWW.THINAIRAPPS.COM) 449
  • Introduction 449
  • Revenue model 449
  • Customers & Partners 449
  • Products and services 449
• UNIMOBILE (WWW.UNIMOBILE.COM) 451
  • Introduction 451
  • Revenue model 452
  • Customers & Partners 452
  • Products and services 452
• VINDIGO (WWW.VINDIGO.COM) 453
  • Introduction 453
  • Revenue model 453
  • Customers & Partners 453
  • Products and services 453
• W-TECHNOLOGIES (WWW.W-TECHNOLOGIES.COM) 455
  • Introduction 455
  • Revenue model 455
  • Customers & Partners 455
  • Products and services 456
• WINDWIRE (WWW.WINDWIRE.COM) 460
  • Introduction 460
  • Revenue model 460
  • Customers & Partners 460
  • Products and services 460
• WIRELESS KNOWLEDGE (WWW.WIRELESSKNOWLEDGE.COM) 461
  • Introduction 461
  • Revenue model 461
  • Customers & Partners 461
  • Products and services 461
• ZED (WWW.ZED.COM) 463
  • Introduction 463
  • Revenue model 463
  • Customers & Partners 463
  • Products and services 464
• ZTANGO (WWW.ZTANGO.COM) 466
  • Introduction 466
  • Revenue model 466
  • Customers & Partners 466
  • Products and services 466

Related Reports