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Is It Time for Wireless E-Commerce?
by: Paul Nicholls


The answer is yes. According to Bill Watterson, author of Calvin and Hobbes, "The problem with the future is that it keeps turning into the present." Businesses are well aware of mobile phones' potential for wireless marketing, advertising, sales, and payments although many thought this potential would be realized somewhere down the road. But it seems like that future is now here.

Critical Mass

Almost a third of North Americans now say they could not live without their cell phone and these devices are rapidly evolving into more than a mere portable tool for voice communications. According to a recent study [AP 2006] Americans have become addicted to their cell phones, with four out of 10 adults aged 18 to 29 considering dropping their landline service. In fact, almost a third (29%) say they could not live without their cell phone. The mobile has reached critical mass.

Thirty-five percent of those surveyed say they send SMS text messages, including 65% of those ages 18-29 and 37% of those aged 30-49. At the same time, 18% say they have used or would like to use a mobile instant messaging service on their cell phone. Meanwhile, 38% say they would like to have desktop IMs from select contacts automatically forwarded to their mobile device, including 50% of those ages 18-29.

In terms of "must-have" features when buying a new handset, the top-runners are: mobile maps (51%), text messaging (48%), and a built-in camera (47%) top the list, followed by games (34%), mobile email (32%), and mobile search (31%).

New Applications

The new .MOBI top level domain is expected to eliminate some basic problems associated with mobile browsing of ordinary Web sites, including large graphics and multimedia content. The new standards will ensure content works for Web browsing, mobile messaging, and device compliance on mobile devices. [Sullivan 2006]

Internet access via mobile phones is actually outpacing wireless access from a notebook PC in many countries with 56% of global mobile phone users browsing the Internet or downloading email in 2005. In Japan 92% of users went online via their mobiles. Rates are high in France and UK as well but flattening in North America. [eMarketer 2006]

About 20% of mobile phone users are already receptive to relevant advertising, if done correctly. Apparently understanding the trade-off of ads for services, over a third of users said they would also be willing to provide advertisers some personal information. [Burns 2005]

Podcasting and cell phones already offer a powerful synergy. Recently Mobilcast announced that it will help NPR deliver 45 of its podcasts to mobile phone users. NPR has had nearly 18 million downloads of its podcasts since its launch at the end of August 2005. [NPR 2006]

Mobile Video

According to an eMarketer report, This is the year that carriers, content providers and marketers are sitting up, taking notice and starting to experiment and invest in mobile television initiatives.

JupiterResearch also finds that the mobile video market is expected to grow by roughly eight times its 2005 revenue size by the end of the decade. In 2005 revenues from mobile video content reached $62 million. By 2010, the number is expected to reach $501 million. [Burns 2006]

From a technical point-of-view, the two key developments for mobile TV are growth in smartphones and growth of advanced 3G networks. Although adoption has been slow to date, these will move mobile TV past the pilot stage toward critical mass and finally to mass-market penetration.

A new study from London-based research company Red Bee Media and British digital media research agency iBurbia indicates that consumers will pay for video they value and are also willing to accept some advertising. [Video Content 2006]

But already "consumer interest bodes well for the mobile industry as vendors use different business models to try and tap into this consumer demand," said Julie Ask, Research Director at JupiterResearch. "The challenge is not interest but rather finding the correct mix of premium content and price points." In the longer term, adoption is expected to depend more on business models and content offerings than on the technology or devices, [JupiterResearch 2006]

Keitai Culture

We may be only a hop-skip-and-jump away from something the Japanese know all about already—keitai culture. There's more to it than just owning a fancy cell phone.

Mobile communications have become part of popular culture and everyday behavior for many Japanese. With over 72% penetration, most everyone between the ages of 12 and 50 (89 million) has a mobile phone. This may provide a proactive glimpse of our own future. "By understanding how a once-alien technology became such a natural extension of everyday life in Japan, we may yet understand what is in store for the rest of the world." [Jardin 2005]

As personal network keys, keitai open doors to other media such as audio and video. They also function as remote controls, letting owners change television channels or operate DVD players. Five million Japanese now subscribe to TV guides on their phones and Sony is offering a hard disk recorder that can be programmed remotely by cell phone.

Cell phones open doors in other ways too: "The embedded circuitry in newer mobiles, once programmed, also authorizes entry through corporate security doors and functions as an electronic key for some homes. Once a child returns from school and flashes the phone over a reader, the phone opens the door and automatically sends an email to the parent reporting his or her arrival." [Johnson 2006]

Future Present

Keitai culture is the present in Japan but all signs suggest that it's our rapidly developing future—and entrepreneurs need to think ahead.

Considering the growing critical mass, new standards, and expanding applications for cell phones, small businesses can no longer afford to ignore their potential for marketing, advertising, sales, and payments. This is especially true in the case of Web-based businesses—since mobiles increasingly appear less a device just to make phone calls with and more a general information, content, and Internet appliance.

Sources

"AP-AOL-Pew Research Center Mobile Lifestyle Survey," AOL Mobile 04/03/06.
Enid Burns. "Mobile Users Will Take a Few Ads," ClickZ Stats 09/14/05.
Enid Burns. "Mobile Video Market Set for Growth," ClickZ Stats 03/28/06.
Xeni Jardin. "How Mobile Phones Conquered Japan," Wired News 08/19/05.
Tim Johnson. "In Japan, Mobile Phones Replacing Wallets, Keys, Credit Cards," Knight Ridder Washington Bureau 04/25/06.
"JupiterResearch: Mobile Video Revs to Reach $500MM," MarketingVOX 03/29/06.
"NPR Podcasts Come to Mobile Phones," Marketing VOX 03/29/06.
Laurie Sullivan. "Mobile Domains For Sale In May," Information Week 03/30/06.
"Video Content on Mobiles: Short Preferred, Ads Tolerated," Marketing VOX 04/10/06.
"Will the Mobile Phone Become the Dominant Internet Platform?" eMarketer 04/21/06.
 

About The Author

Dr Paul Nicholls is a regular fixture at eBizTutors.com where you can find many more ebiz resources for the new or seasoned online entrepreneur: blogs, tutorials, programs and support. Visit us at http://www.eBizTutors.com.
 

This article was posted on October 16, 2006

 

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