Mobile Commerce Takes Off

This publication has been discontinued on July 19, 2011.

Introduction

This study provides a comprehensive assessment of current status and emerging trends in mobile commerce. It quantifies and forecasts the m-commerce market, covering digital content, online shopping, financial transactions, POS retail, proximity payments, marketing and advertising and enterprise segments. The report examines developments in digital content with particular emphasis on downloadable games, ring-tones and music, video and TV services. The report covers all the major regions of the world with particular focus on Asia-Pacific, Europe, and the United States. The report analyzes factors impacting m-commerce particularly security and billing, and analyzes business and pricing models suitable for m-commerce.

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY 11

1.1 Overview 11

1.2 Summary of Key Findings 11

1.2.1 Current Trends 11

1.2.2 Emerging Trends 11

1.2.3 Market Forecasts 12

2 SCOPE, METHODOLOGY, TARGET AUDIENCE, AND AUTHOR 15

2.1 Scope 15

2.2 Additional Related Information 15

2.3 Methodology 16

2.3.1 Interviews 16

2.3.2 Additional Primary and Secondary Research 16

2.3.3 Trend Tracking 16

2.3.4 Global Subscriber Forecasts 17

2.3.5 Global Revenue Forecasts 17

2.4 Target Audience 17

2.5 About the Authors 17

2.5.1 Susan Welsh de Grimaldo 17

2.5.2 Naqi A. Jaffery 18

3 DEFINING M-COMMERCE 19

3.1 Overview 19

3.2 An Evolving Definition of M-Commerce 19

3.3 Company Perspectives 21

3.4 M-Commerce Broadly Defined 22

3.5 Categories Included in Broadly Defined M-Commerce 22

3.5.1 Remote Transactions 22

3.5.1.1 Digital Content Downloads 22

3.5.1.2 Streaming Media 22

3.5.1.3 Services/Semi-Tangibles 22

3.5.1.4 Tangible Goods 22

3.5.1.5 Marketing and Promotions 22

3.5.1.6 Financial Transactions 22

3.5.1.7 Customer/Constituent Services 22

3.5.2 Proximity Payments 22

3.5.2.1 POS for Tangible/Semi-tangible Goods 22

3.5.2.2 M2P/P2M Transactions 22

3.6 Question: What Is and Is Not M-Commerce? 22

3.6.1 Promos and Freebies: No Revenue Generated from Consumer 22

3.6.2 Free Monetary Transaction Services and Payment for Other Services 22

3.6.3 Trivia Games and Voting: Entertainment, Marketing, or M-Commerce 22

3.6.4 Only Part of Transaction Completed on Mobile Device 22

3.6.5 Wi-Fi, Bluetooth, and Wireless WAN Connections on Laptops, PDAs 22

4 EVOLVING M-COMMERCE: MARKET STAGE AND DEVELOPMENT 22

4.1 Today's Nascent Market Stage 22

4.1.1 An Early Stage Market 22

4.1.2 Market Stages 22

4.1.3 M-Commerce Market is Changing Fast 22

4.2 Global Market Trends and Market Stage by Category 22

4.2.1 Digital Content 22

4.2.2 Downloadable Applications 22

4.2.2.1 BREW 22

4.2.2.2 Java 22

4.2.2.3 i-mode 22

4.2.2.4 Downloadable Mobile Games 22

4.2.3 Mobile Multimedia 22

4.2.4 Location-Based Services (LBS) 22

4.2.5 Messaging for M-Commerce 22

4.2.5.1 Short Codes and SMS 22

4.2.5.2 Premium SMS 22

4.2.5.3 MMS 22

4.2.5.4 Push MMS for Mobile Video Streaming 22

4.2.6 Mobile Payments 22

4.3 Case Study: Walt Disney Internet Group 22

4.4 Trends and Market Stage by Region 22

4.4.1 Regional Comparison 22

4.4.2 Asia-Pacific 22

4.4.2.1 Japan 22

4.4.2.2 South Korea 22

4.4.2.3 China 22

4.4.2.4 Australia 22

4.4.3 Europe 22

4.4.3.1 Vodafone 22

4.4.3.2 T-Mobile 22

4.4.3.3 Orange 22

4.4.3.4 mmO2 22

4.4.3.5 Hutchison's 3 22

4.4.3.6 TeliaSonera 22

4.4.3.7 Telef?nica M?viles Espa?a 22

4.4.4 North America 22

4.4.5 Latin America 22

4.5 What's Next? M-Commerce Evolves 22

4.5.1 Messaging Moves to Content 22

4.5.2 Transactions Become More Interactive as P2P Takes Off 22

4.5.3 Digital Content Trends 22

4.5.3.1 Video and Multimedia 22

4.5.3.2 Games 22

4.5.3.3 From Ring-Tones to Ring-Tunes 22

4.5.3.4 Evolution of Storefront for Digital Content 22

4.5.4 Brand Involvement in Mobile Markets 22

4.5.5 Mobile Payments and Purchases: From Digital Content to Tangibles? 22

4.5.6 Consumers to Enterprise? From Early Adopters to Mass Market 22

4.5.6.1 Age Groups 22

4.5.6.2 Enterprise 22

4.5.7 Timeframe for M-Commerce Evolution 22

4.5.7.1 Recent History 22

4.5.7.2 Near-Term/Short-Term (Within One Year) 22

4.5.7.3 Mid-Term (One-to-Three Years) 22

4.5.7.4 Long-Term (Three Years or More) 22

5 MARKET ENABLERS 22

5.1 Devices 22

5.1.1 Handset Replacement Cycle 22

5.1.2 Terminal Development Trends 22

5.1.3 User Interface (UI) 22

5.1.4 Out-of-Box Capabilities 22

5.1.5 Operating Systems (OS) 22

5.1.6 Browsers 22

5.1.7 Multimedia: Audio, Graphics, Video 22

5.1.8 Personalization and Settings 22

5.1.9 Multimode Phones 22

5.1.10 Connectivity Solutions 22

5.1.11 Device Proliferation and Segmentation 22

5.2 Network 22

5.2.1 Network Upgrades 22

5.2.2 Location-Based Services (LBS) 22

5.2.3 Future Network Trends 22

5.3 Platforms Supporting M-Commerce and Related VAS 22

5.3.1 Requirements of M-Commerce Platforms 22

5.3.2 E-Commerce Solutions 22

5.3.2.1 E-Commerce Platforms 22

5.3.2.2 Content Publishing, Aggregation, Delivery and Charging 22

5.3.2.3 Enabling Tools 22

5.3.2.4 Location-Based Services 22

5.3.3 Role of Mobile Messaging 22

5.3.3.1 SMS and MMS as Delivery Mechanisms 22

5.3.3.2 Messaging Solutions 22

5.3.4 BREW 22

5.3.5 Java/J2ME 22

5.3.6 NTT DoCoMo's i-mode 22

5.3.7 Payment Mechanisms 22

5.3.7.1 Charge to Mobile Bill 22

5.3.7.2 Use of SMS in the Payment Process 22

5.3.7.3 Mobile Wallet 22

5.3.7.4 Server Wallets 22

5.3.7.5 Smart Cards 22

5.3.7.6 Interactive Voice Response (IVR) 22

5.3.7.7 Point-of-Sale (POS) 22

5.3.7.8 Other Local/Proximity Payments 22

5.3.7.9 Simpay 22

5.3.7.10 Mobipay 22

5.3.7.11 paybox.net AG 22

5.3.7.12 Valista 22

5.3.8 Billing/Back-End Systems 22

5.4 Digital Rights Management (DRM) 22

5.5 Security Features 22

5.5.1 Authentication 22

5.5.2 Non-Repudiation 22

5.5.3 Confidentiality and Integrity 22

5.6 Standards and Interoperability 22

5.7 Development Tools, Extensions, and Application Features 22

5.8 Navigation: UI at the Distribution Level 22

6 MARKET DRIVERS 22

6.1 Demand Drivers 22

6.1.1 Culture and Events 22

6.1.2 Age and Familiarity with the Internet and Mobile Devices 22

6.1.3 Devices 22

6.1.3.1 Cool 22

6.1.3.2 Color 22

6.1.3.3 Low Price Points for Cool, Color Handsets 22

6.1.3.4 Device Segmentation 22

6.1.3.5 Multimedia: Sound Quality and Video as Drivers 22

6.1.3.6 Packaging and Out-of-Box Functionality 22

6.1.3.7 Handset Subsidies 22

6.1.3.8 Enterprise Device Functionality 22

6.1.4 Market Segmentation 22

6.1.5 Services, Applications, and Content 22

6.1.5.1 What Types of Consumer Content and Services Are Best for Mobile? 22

6.1.5.2 What Is Driving Sales? 22

6.1.5.3 Drivers of Digital Content Purchases 22

6.1.6 POS Payment Drivers 22

6.1.7 Market Scale and Viral Marketing 22

6.1.8 Marketing and Consumer Education 22

6.1.8.1 Catalog and What's New 22

6.1.8.2 Retail and Demos 22

6.1.8.3 Trial Offers and Special Promotions 22

6.1.8.4 Alerts 22

6.1.8.5 Wired Websites 22

6.1.8.6 Early Successes 22

6.1.9 Ease of Use/Usability 22

6.1.10 Flexible, Clear Pricing 22

6.1.11 Prepaid 22

6.1.12 Enterprise Drivers 22

6.2 Operator Drivers 22

6.2.1 Competition and Need for New Revenue Streams 22

6.2.2 Operator Sales Force Drivers 22

6.3 Developer Drivers 22

6.4 Drivers of Brand Involvement 22

7 CHALLENGES M-COMMERCE STILL FACES 22

7.1 How to Get from Here to There 22

7.2 Business Case and Models: How to Make Money on M-Commerce 22

7.3 Developing the Right Partnerships 22

7.4 Figuring Out Content, Applications, and Service Offerings 22

7.4.1 Location-Based Services (LBS) 22

7.4.2 Enterprise 22

7.5 User Experience 22

7.5.1 Ease of Use and Consistency 22

7.5.2 Navigation 22

7.5.3 Personalization 22

7.6 Figuring Out Pricing Models 22

7.6.1 Consumer Mindset 22

7.6.2 Operator Incentive 22

7.6.3 Content Aggregator and Developer Incentive 22

7.6.4 Prepaid M-Commerce 22

7.7 Development Costs and Other Developer Issues 22

7.8 Marketing M-Commerce and M-Commerce for Marketing 22

7.9 Educating Consumers 22

7.10 Sales Force Training and Incentives 22

7.11 Customer Relationship Management and Customer Care Costs 22

7.12 Billing and Operations 22

7.12.1 Need for Synchronization 22

7.12.2 Challenges of Legacy Billing Systems 22

7.12.3 Challenge to Support Multiple Payment Options: Micropayments, BOBO, Cash 22

7.12.4 Need for More Complex Settlement Scenarios 22

7.12.5 Defining Who Has Liability 22

7.12.6 Sharing Commissions on POS Sales 22

7.13 Network Challenges 22

7.14 Device Challenges 22

7.15 Security 22

7.16 Privacy 22

7.17 Spam 22

7.18 Viruses 22

7.19 Need for Standards 22

7.19.1 POS Solutions 22

7.19.2 Digital Rights Management (DRM) 22

7.20 Interoperability and Roaming 22

7.21 Economy, Financial Markets 22

7.22 Regulation 22

8 FORECASTING M-COMMERCE 22

8.1 Overview 22

8.1.1 The Challenge of Forecasting M-Commerce 22

8.1.2 What the Forecasts Show 22

8.1.2.1 M-Commerce Users 22

8.1.2.2 M-Commerce Revenues 22

8.1.2.3 M-Commerce Transaction Categories 22

8.1.3 Global Forecasts 22

8.2 Global M-Commerce Users 22

8.2.1 Methodology 22

8.2.1.1 Addressable Market 22

8.2.1.2 Adoption Rate and Key Adoption Factors 22

8.2.2 M-Commerce User Forecasts 22

8.2.2.1 Global M-Commerce Users by Region 22

8.2.2.2 Global M-Commerce Users by Category 22

8.3 Global M-Commerce Revenues 22

8.3.1 Methodology 22

8.3.2 M-Commerce Revenue Forecasts 22

8.3.2.1 Global M-Commerce Revenues by Region 22

8.3.2.2 Global M-Commerce Revenues by Category 22

9 CONCLUSIONS & RECOMMENDATIONS 22

9.1 Conclusions 22

9.1.1 Defining M-Commerce 22

9.1.2 M-Commerce in Context 22

9.2 Key Findings 22

9.2.1 Current Global and Regional M-Commerce Trends 22

9.2.2 What's Next? Evolving Trends in M-Commerce 22

9.3 Recommendations 22

9.3.1 For Operators 22

9.3.2 For Technology Vendors 22

9.3.3 For Merchants and Brands 22

9.3.4 For Financial Institutions 22

9.3.5 For Industry Associations 22

9.3.6 For All Players Across the Value Chain 22

APPENDIX I: VODAFONE 22

APPENDIX 2: LIST OF ACRONYMS 22

LIST OF TABLES

• TABLE I: GLOBAL M-COMMERCE USERS BY REGION (2003 - 2008) 22
• TABLE II: GLOBAL M-COMMERCE USERS BY CATEGORY (2003 - 2008) 22
• TABLE III: TYPICAL PRICING FOR BREW DEVELOPER APPLICATION PRICE (DAP) 22
• TABLE IV: GLOBAL M-COMMERCE REVENUES BY REGION (2003 - 2008) 22
• TABLE V: GLOBAL M-COMMERCE REVENUES BY CATEGORY (2003 - 2008) 22

List of Exhibits

• EXHIBIT 1: GLOBAL M-COMMERCE USERS BY REGION, 2003 13
• EXHIBIT 2: GLOBAL M-COMMERCE USERS BY REGION, 2008 13
• EXHIBIT 3: M-COMMERCE CATEGORIES 22
• EXHIBIT 4: MARKET STAGES FOR SUCCESSFUL PRODUCTS/SERVICES 22
• EXHIBIT 5: WHAT'S CURRENTLY HOT? 22
• EXHIBIT 6: CONTENTS OF SK TELECOM'S "JUNE" SERVICE 22
• EXHIBIT 7: SK TELECOM'S NATE SERVICES 22
• EXHIBIT 8: KTF'S 'MAGIC MULTIPACK CONTENTS 22
• EXHIBIT 9: KTF'S K-MERCE CATEGORIES 22
• EXHIBIT 10: KTF'S FIMM CONTENTS 22
• EXHIBIT 11: KTF'S VIZ OFFERINGS 22
• EXHIBIT 12: KTF'S FIMM RATE PLAN 22
• EXHIBIT 13: TELSTRA'S INFORMATION SERVICES 22
• EXHIBIT 14: 3'S OFFERINGS 22
• EXHIBIT 15: VODAFONE AUSTRALIA'S CONSUMER SERVICES 22
• EXHIBIT 16: VODAFONE LIVE! OFFERINGS 22
• EXHIBIT 17: T-MOBILE'S INTERNET OFFERINGS 22
• EXHIBIT 18: T-MOBILE'S MOBILE MULTIMEDIA STRATEGY 22
• EXHIBIT 19: OVERVIEW OF HUTCHISON TELECOMMUNICATIONS GROUP 22
• EXHIBIT 20: EVOLUTION OF M-COMMERCE 22
• EXHIBIT 21: TERMINAL DEVELOPMENT TRENDS 22
• EXHIBIT 22: GLOBAL M-COMMERCE USERS AND REVENUES (2003-2008) 22
• EXHIBIT 23: GLOBAL M-COMMERCE USERS BY REGION (2003 - 2008) 22
• EXHIBIT 24: GLOBAL M-COMMERCE USERS BY CATEGORY (2003 - 2008) 22
• EXHIBIT 25: GLOBAL M-COMMERCE USERS BY CATEGORY (2003) 22
• EXHIBIT 26: GLOBAL M-COMMERCE USERS BY CATEGORY (2008) 22
• EXHIBIT 27: GLOBAL M-COMMERCE REVENUES BY REGION (2003 - 2008) 22
• EXHIBIT 28: GLOBAL M-COMMERCE REVENUES BY REGION (2003) 22
• EXHIBIT 29: GLOBAL M-COMMERCE REVENUES BY REGION (2008) 22
• EXHIBIT 30: GLOBAL M-COMMERCE REVENUES BY CATEGORY (2003 - 2008) 22
• EXHIBIT 31: GLOBAL M-COMMERCE REVENUES BY CATEGORY (2003) 22
• EXHIBIT 32: GLOBAL M-COMMERCE REVENUES BY CATEGORY (2008) 22

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