Feature

UK firms not ready for mobile commerce

There is no shortage of enthusiasm for mobile commerce among suppliers but, as new research reveals, many users feel far from ready to embrace the new technology

Skills shortages, lack of bandwidth, unproven technology and a lack of budget are hampering immediate attempts by UK businesses to adopt mobile commerce technology, according to research jointly conducted by E-business Expo, Compaq and Computer Weekly.

Mobile commerce is attracting bucket-loads of attention from suppliers, but the signs are that it is too early for many users to even contemplate the idea.

While mobile commerce is seen as a key technology of the future - 168 companies, or 34% of the sample of 497, rated it as "quite important" - businesses are neither willing nor able to formulate a mobile-commerce strategy at a time when suppliers are not unified in their approach to the market.

Of course, there are standards in place such as wireless application protocol (Wap) and XML that are making inroads into application developments, but the reality is that the technology is still extremely immature.

Currently, just 24% of businesses from the sample said they have a mobile-commerce strategy. Many of the companies who don't have a mobile-commerce strategy - 31% - said they were too busy working on other areas of their business.

It is much too early for mobile commerce to be regarded as a critical business technology and thus warrant considerable investment of money and skills.

While the skills crisis is biting into vital business projects, companies simply cannot afford to throw money at a strategy that has no obvious signs of returning their investment.

"We are right at the start of the lifecycle for mobile commerce," said Steve Walker, UMTS marketing director at Ericsson UK. "The current low bandwidth means that we don't have all the technology we need to forge ahead with mobile commerce, although we are starting to implement general packet radio services (GPRS) now."

GPRS services will be a key enabler of mobile commerce. Internet operators are looking to roll out the technology early next year. "This will change things considerably," said Walker. "Better bandwidth will enable greater interest in Wap and related mobile data technologies."

Anne-Marie Duffy, Microsoft's mobile systems group marketing manager, agreed. "The mobile operators will play a huge role," she said, adding that much of the mobile commerce future rides on bandwidth availability. She added that richer devices and content and applications that recognise mobile devices and provide content relevant to the platform will be key. Of course, Microsoft is building its .net strategy on XML which enables this kind of automated mobile control.

However, the research does not wholly support the optimism about GPRS. When companies were asked which channels will enable customers to access products and services in the future, the replies were mixed. Just 9% opted for GPRS - 22% plumped for Wap and 19.5% for e-commerce via a PC.

The surprising one is Wap. The technology has generally been slated over the past few months for not really delivering on its early promise. This is, of course, slightly unfair given that Wap is a little ahead of its time, considering the technology limitations and the cost of calling.

Wap is not cheap, yet Duffy and Walker are again in agreement that Wap will spearhead mobile commerce services.

So is this difference of opinion over the key mobile technologies showing a lack of understanding at the business and consumer level or is it that suppliers are pinning their hopes on the next big technology breakthrough and sticking to it?

"Hardware and software suppliers have moved from 'webifying' their solutions and placing an e in front of everything, to 'mobilising' their offerings and adding an m to everything," said Mauro Mortali, senior analyst at Trend Consulting.

"Despite the early market enthusiasm for the concept of mobile commerce, adoption has been slow. The sheer number of mobile devices on the market underpins the potential market for mobile commerce, but widespread acceptance is still uncertain."

Mortali added that the greatest barrier to growth was the technology. To gain market acceptance customers must be confident that transactions will be secure and that data will be protected. He agreed with Duffy and Walker that bandwidth is key. Without speed and quality of data delivery, the mobile commerce market does not stand a chance.

"Until technologies such as GPRS and 3G, as well as more functional and user-friendly devices come down stream - allowing customers fast and easy access to information and services - there is no compelling reason for mobile commerce uptake," said Mortali. "So far, Wap has failed to capture the imagination of the public precisely because it does not address these two points.

"Mobile commerce will take off, but customers will need more convincing from both IT and telecoms hardware and software suppliers, as well as the mobile operators, that mobile commerce can be trusted and can deliver to expectation."

The research suggests that Mortali is spot on. There is a lot of uncertainty about mobile commerce and how it will actually fit into current business models. About 35% of the survey sample did not know when, or if, they would implement a mobile-commerce strategy, despite the fact that just 18% felt it would bring no benefit to the organisation.

There are two different strands to the argument here. The first is how the technology will help enable mobile commerce and the second is whether or not people will use it anyway.

Companies such as Ericsson and Microsoft have been planning their mobile data strategies for some time now.

Microsoft has launched its .net strategy and released its Mobile Information Server product as part of its overall strategy to recognise and enable a market that is more than just the desktop PC. It has developed a smartphone codenamed Stinger which it will launch next year and is adding more mobile-related application programming interfaces to its Windows platforms.

This will undoubtedly help in the drive towards a more mobile workforce, but will this workforce want to buy products and services from a mobile device?

The survey points to a healthy business-to-business market, with 50% claiming this would be the main use for mobile commerce. According to Walker, there is a danger in assuming that because mobile commerce is a buzz technology, everyone wants it. The reality is, of course, different. "It won't replace anything, but it will be complementary to other forms of commerce," he said.

Walker said the industry in general "has to be realistic" and realise that people have a poor perception of commerce over the internet and migrating that to mobile devices may heighten, not remove, their fears.

Branding and technology initiatives are attempting to boost consumer confidence in mobile commerce. Bigger bandwidth is coming along with richer HTML-enabled personal digital assistants and smartphones, and content and applications will be "intelligent" to specific mobile devices.

All this should help ensure that mobile commerce has a future. Most companies are citing 2001 as the year of mobile commerce, but perhaps the mobile commerce suppliers should learn from the Bluetooth experience and not over-hype a technology that is not yet ready to be implemented by business.


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This was first published in October 2000

 

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