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Mobile Commerce: Ready for Take-Off

  • ID: 37959
  • Report
  • September 2003
  • Telecom Trends International (TTI)
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There will be 95 million global m-commerce users by the end of this year, and these will balloon to 1.7 billion users by 2008. At the same time, revenues from m-commerce will experience a Cagr of 141%, growing from $6.8 billion in 2003 to over $554 billion in 2008.

Mobile commerce is taking off due to a confluence of several factors - packet-data networks, enhanced devices, and availability of content. This report provides a comprehensive assessment of current status and emerging trends in m-commerce. It quantifies the market and projects its growth over the next five years, both in terms of subscribers and revenues, for all regions. The report identifies the major m-commerce categories, and forecasts their growth. It examines market drivers as well as obstacles to m-commerce. The report analyzes issues impacting m-commerce such as security, billing, standards, and regulation, and discusses business and pricing models suitable for m-commerce.
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1 EXECUTIVE SUMMARY 11<BR><BR>1.1 Overview 11<BR>1.1.1 Defining M-Commerce 11<BR>1.1.2 M-Commerce in Context 11<BR>1.2 Key Findings 12<BR>1.2.1 Current Global and Regional M-Commerce Trends 12<BR>1.2.2 What’s Next? Evolving Trends in M-Commerce 13<BR><BR>2 SCOPE, METHODOLOGY, TARGET AUDIENCE, AND AUTHOR 17<BR><BR>2.1 Scope 17<BR>2.2 Additional Related Information 17<BR>2.3 Methodology 18<BR>2.3.1 Interviews 18<BR>2.3.2 Additional Primary and Secondary Research 18<BR>2.3.3 Trend Tracking 19<BR>2.3.4 Global Subscriber Forecasts 19<BR>2.3.5 Global Revenue Forecasts 19<BR>2.4 Target Audience 19<BR>2.5 About the Author, Susan Welsh de Grimaldo 20<BR><BR>3 DEFINING M-COMMERCE 21<BR><BR>3.1 An Evolving Definition of M-Commerce 21<BR>3.2 Company Perspectives 22<BR>3.3 M-Commerce Broadly Defined 24<BR>3.4 Categories Included in Broadly Defined M-Commerce 25<BR>3.4.1 Remote Transactions 25<BR> Digital Content Downloads 26<BR> Streaming Media 27<BR> Services/Semi-Tangibles 27<BR> Tangible Goods 27<BR> Marketing and Promotions 27<BR> Financial Transactions 28<BR> Customer/Constituent Services 28<BR>3.4.2 Proximity Payments 28<BR> POS for Tangible/Semi-tangible Goods 28<BR> M2P/P2M Transactions 28<BR>3.5 Question: What Is and Is Not M-Commerce? 29<BR>3.5.1 Promos and Freebies: No Revenue Generated from Consumer 29<BR>3.5.2 Free Monetary Transaction Services and Payment for Other Services 30<BR>3.5.3 Trivia Games and Voting: Entertainment, Marketing, or M-Commerce 30<BR>3.5.4 Only Part of Transaction Completed on Mobile Device 30<BR>3.5.5 Wi-Fi, Bluetooth, and Wireless WAN Connections on Laptops, PDAs 31<BR><BR>4 EVOLVING M-COMMERCE: MARKET STAGE AND DEVELOPMENT 33<BR><BR>4.1 Today’s Nascent Market Stage 33<BR>4.1.1 An Early Stage Market 33<BR>4.1.2 Market Stages 34<BR>4.1.3 M-Commerce Market is Changing Fast 35<BR>4.2 Global Market Trends and Market Stage by Category 36<BR>4.2.1 Digital Content 36<BR>4.2.2 Downloadable Applications 37<BR> BREW 37<BR> Java 38<BR> i-mode 38<BR> Downloadable Mobile Games 38<BR>4.2.3 Mobile Multimedia 39<BR>4.2.4 Location-Based Services (LBS) 39<BR>4.2.5 Messaging for M-Commerce 40<BR> Premium SMS 40<BR> MMS 40<BR> Push MMS for Mobile Video Streaming 41<BR>4.2.6 Mobile Payments 41<BR>4.3 Trends and Market Stage by Region 42<BR>4.3.1 Regional Comparison 42<BR>4.3.2 Asia-Pacific 43<BR> Japan 43<BR> South Korea 45<BR> China 47<BR> Australia 48<BR> Sri Lanka 49<BR>4.3.3 Europe 49<BR> Vodafone 49<BR> T-Mobile 50<BR> Orange 50<BR> mmO2 50<BR> Hutchison 51<BR> Sonera 51<BR> Telefónica Móviles España 52<BR>4.3.4 North America 53<BR>4.3.5 Latin America 55<BR>4.4 What’s Next? M-Commerce Evolves 55<BR>4.4.1 Messaging Moves to Content 56<BR>4.4.2 Transactions Become More Interactive as P2P Takes Off 57<BR>4.4.3 Digital Content Trends 57<BR> Video and Multimedia 58<BR> Games 58<BR> Evolution of Storefront for Digital Content 58<BR>4.4.4 Brand Involvement in Mobile Markets 59<BR>4.4.5 Mobile Payments and Purchases: From Digital Content to Tangibles? 59<BR>4.4.6 Consumers to Enterprise? From Early Adopters to Mass Market 60<BR> Age Groups 60<BR> Enterprise 61<BR>4.4.7 Timeframe for M-Commerce Evolution 62<BR> Recent History 62<BR> Near-Term/Short-Term (Within One Year) 62<BR> Mid-Term (One-to-Three Years) 62<BR> Long-Term (Three Years or More) 63<BR><BR>5 MARKET ENABLERS 65<BR><BR>5.1 Devices 65<BR>5.1.1 Handset Replacement Cycle 65<BR>5.1.2 Terminal Development Trends 65<BR>5.1.3 User Interface (UI) 66<BR>5.1.4 Out-of-Box Capabilities 67<BR>5.1.5 Operating Systems (OS) 68<BR>5.1.6 Browsers 69<BR>5.1.7 Multimedia: Audio, Graphics, Video 70<BR>5.1.8 Personalization and Settings 71<BR>5.1.9 Multimode Phones 72<BR>5.1.10 Connectivity Solutions 72<BR>5.1.11 Device Proliferation and Segmentation 72<BR>5.2 Network 73<BR>5.2.1 Network Upgrades 73<BR>5.2.2 Location-Based Services (LBS) 73<BR>5.2.3 Future Network Trends 74<BR>5.3 Platforms Supporting M-Commerce and Related VAS 74<BR>5.3.1 Requirements of M-Commerce Platforms 75<BR>5.3.2 Examples of Solutions from Selected Companies 75<BR>5.3.3 Messaging: SMS and MMS 78<BR>5.3.4 BREW 79<BR>5.3.5 Java/J2ME 81<BR>5.3.6 DoCoMo’s i-mode 82<BR>5.3.7 Payment Mechanisms 82<BR> Charge to Mobile Bill 83<BR> Use of SMS in the Payment Process 83<BR> Mobile Wallet 84<BR> Server Wallets 85<BR> Smart Cards 85<BR> Interactive Voice Response (IVR) 85<BR> Point-of-Sale (POS) 86<BR> Other Local/Proximity Payments 86<BR> Simpay 87<BR> Mobipay 87<BR>5.3.8 Billing/Back End Systems 88<BR>5.4 Digital Rights Management (DRM) 88<BR>5.5 Security Features 89<BR>5.5.1 Authentication 89<BR>5.5.2 Non-Repudiation 90<BR>5.5.3 Confidentiality and Integrity 90<BR>5.6 Standards and Interoperability 91<BR>5.7 Development Tools, Extensions, and Application Features 92<BR>5.8 Navigation: UI at the Distribution Level 93<BR><BR>6 MARKET DRIVERS 95<BR><BR>6.1 Demand Drivers 95<BR>6.1.1 Culture and Events 95<BR>6.1.2 Age and Familiarity with the Internet and Mobile Devices 95<BR>6.1.3 Devices 96<BR> Cool 96<BR> Color 97<BR> Low Price Points for Cool, Color Handsets 97<BR> Device Segmentation 97<BR> Multimedia: Sound Quality and Video as Drivers 97<BR> Packaging and Out-of-Box Functionality 98<BR> Handset Subsidies 98<BR> Enterprise Device Functionality 98<BR>6.1.4 Market Segmentation 98<BR>6.1.5 Services, Applications, and Content 99<BR> What Types of Consumer Content and Services Are Best for Mobile? 99<BR> What Is Driving Sales? 100<BR> Drivers of Digital Content Purchases 100<BR> Role of Comfort and Familiarity 100<BR> Role of Variety 101<BR> Role of Quality Content and Services 101<BR> Role of Functionality and the Ability to Do More Things on a Mobile Phone 101<BR>6.1.6 POS Payment Drivers 101<BR>6.1.7 Market Scale and Viral Marketing 102<BR>6.1.8 Marketing and Consumer Education 102<BR> Catalog and What’s New 103<BR> Retail and Demos 103<BR> Trial Offers and Special Promotions 103<BR> Alerts 104<BR> Wired Websites 104<BR> Early Success 104<BR>6.1.9 Ease of Use/Usability 104<BR>6.1.10 Flexible, Clear Pricing 105<BR>6.1.11 Prepaid 105<BR>6.1.12 Enterprise Drivers 106<BR>6.2 Operator Drivers 106<BR>6.2.1 Competition and Need for New Revenue Streams 106<BR>6.2.2 Operator Sales Force Drivers 107<BR>6.3 Developer Drivers 108<BR>6.4 Drivers of Brand Involvement 108<BR><BR>7 CHALLENGES M-COMMERCE STILL FACES 111<BR><BR>7.1 How to Get from Here to There 111<BR>7.2 Business Case and Models: How to Make Money on M-Commerce 111<BR>7.3 Developing the Right Partnerships 112<BR>7.4 Figuring Out Content, Applications, and Service Offerings 113<BR>7.4.1 Location-Based Services (LBS) 114<BR>7.4.2 Enterprise 114<BR>7.5 User Experience 115<BR>7.5.1 Ease of Use and Consistency 115<BR>7.5.2 Navigation 115<BR>7.5.3 Personalization 116<BR>7.6 Figuring Out Pricing Models 116<BR>7.6.1 Consumer Mindset 116<BR>7.6.2 Operator Incentive 117<BR>7.6.3 Content Aggregator and Developer Incentive 117<BR>7.6.4 Prepaid M-Commerce 117<BR>7.7 Development Costs and Other Developer Issues 118<BR>7.8 Marketing M-Commerce and M-Commerce for Marketing 118<BR>7.9 Educate Consumers 119<BR>7.10 Sales Force Training and Incentives 119<BR>7.11 Customer Relationship Management and Customer Care Costs 120<BR>7.12 Billing and Operations 120<BR>7.12.1 Need for Synchronization 120<BR>7.12.2 Challenges of Legacy Billing Systems 120<BR>7.12.3 Challenge to Support Multiple Payment Options: Micropayments, BOBO, Cash 121<BR>7.12.4 Need for More Complex Settlement Scenarios 121<BR>7.12.5 Defining Who Has Liability 122<BR>7.12.6 Sharing Commissions on POS Sales 122<BR>7.13 Network Challenges 122<BR>7.14 Device Challenges 123<BR>7.15 Security 123<BR>7.16 Privacy 124<BR>7.17 Spam 125<BR>7.18 Viruses 125<BR>7.19 Need for Standards 126<BR>7.19.1 POS Solutions 126<BR>7.19.2 Digital Rights Management (DRM) 126<BR>7.20 Interoperability and Roaming 128<BR>7.21 Economy, Financial Markets 128<BR>7.22 Regulation 128<BR><BR>8 FORECASTING M-COMMERCE 131<BR><BR>8.1 Overview 131<BR>8.1.1 The Challenge of Forecasting M-Commerce 131<BR>8.1.2 What the Forecasts Show 131<BR> M-Commerce Users 131<BR> M-Commerce Revenues 131<BR> M-Commerce Transaction Categories 132<BR>8.1.3 Global Forecasts 133<BR>8.2 Global M-Commerce Users 134<BR>8.2.1 Methodology 134<BR> Addressable Market 134<BR> Adoption Rate and Key Adoption Factors 134<BR>8.2.2 M-Commerce User Forecasts 135<BR> Global M-Commerce Users by Region 135<BR> Global M-Commerce Users by Category 136<BR>8.3 Global M-Commerce Revenues 138<BR>8.3.1 Methodology 138<BR>8.3.2 M-Commerce Revenue Forecasts 140<BR> Global M-Commerce Revenues by Region 140<BR> Global M-Commerce Revenues by Category 142<BR><BR>9 CONCLUSIONS & RECOMMENDATIONS 147<BR><BR>9.1 Conclusions 147<BR>9.2 Recommendations 147<BR>9.2.1 For Operators 147<BR>9.2.2 For Technology Vendors 148<BR>9.2.3 For Merchants and Brands 149<BR>9.2.4 For Financial Institutions 149<BR>9.2.5 For Industry Associations 149<BR>9.2.6 For All Players Across the Value Chain 149<BR><BR>APPENDIX: ABBREVIATIONS AND ACRONYMS 151<BR><BR>List of Figures <BR><BR>Figure 1: M-Commerce Categories 26<BR>Figure 2: Market Stages for Successful Products/Services 35<BR>Figure 3: Evolution of M-Commerce 56<BR>Figure 4: Global M-Commerce Users and Revenues (2003-2008) 133<BR>Figure 5: Global M-Commerce Users by Region (2003 - 2008) 135<BR>Figure 6: Global M-Commerce Users by Category (2003 - 2008) 137<BR>Figure 7: Global M-Commerce Users by Category (2003) 137<BR>Figure 8: Global M-Commerce Users by Category (2008) 138<BR>Figure 9: Global M-Commerce Revenues by Region (2003 - 2008) 141<BR>Figure 10: Global M-Commerce Revenues by Region (2003) 141<BR>Figure 11: Global M-Commerce Revenues by Region (2008) 142<BR>Figure 12: Global M-Commerce Revenues by Category (2003 - 2008) 143<BR>Figure 13: Global M-Commerce Revenues by Category (2003) 144<BR>Figure 14: Global M-Commerce Revenues by Category (2008) 145<BR><BR><BR>LIST OF TABLES<BR><BR>Table I: Global M-Commerce Users by Region (2003 - 2008) 135<BR>Table II: Global M-Commerce Users by Category (2003 - 2008) 136<BR>Table III: Typical Pricing for BREW Developer Application Price (DAP) 139<BR>Table IV: Global M-Commerce Revenues by Region (2003 - 2008) 140<BR>Table V: Global M-Commerce Revenues by Category (2003 - 2008) 143
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown