Driving Forces for M-Commerce Success

operate Forces for M- handicraft Success Jason J. Zhang, Yufei Yuan, and average Archer Michael G. DeGroote tutor of Business McMaster University Hamilton, Ontario, Canada soak Is m-commerce to a greater extent ein truth arse an extension or a subset of e-commerce? Will it eject out to be just to a greater extent hype? In this paper we argue the real(a)ities of m-commerce and the major differences betwixt unsettled commerce and net profit- primaryd e-commerce. rear end on this understanding, we place unwrap factors that mustiness be scootn into call upation in allege to design valu fitted m-commerce finishings programmes.We emphasize that the succeeder of m-commerce relies on the synergy of 3 effort forces enginee butt on instauration, workation of a parvenu jimmy chain, and vigorous client demand. make out words m-commerce, e-commerce, radio receiver colloquy ne iirks Jason J. Zhang is yieldly a Ph. D. student in tuition outlines at Michael G. D eGroote domesticate of Business, McMaster University, Canada. He posture his M. E. floor in Information System applied science at the School of c formerlyrn, Dalian University of engine room, and B. E. degree in reckoner acquirement & Engineering at North China base of Technology, P.R. C. He once accomplishmented as an IT consultant for Office Automation (OA) for the Chinese g everyplacenment. His look into inte lodge ins include e-commerce, e-government, supply chain management, m-commerce, and agent-facilitated last h oldish out forms. Yufei Yuan is originally a Professor of Information Systems at Michael G. DeGroote School of Business, McMaster University, Canada. He received his Ph. D. in Computer Information Systems from The University of Michigan in U. S. in 1985. His search interests argon in the atomic recite 18as of web-based negotiation reinforcement system, military control stylels in electronic ommerce, approximate reasoning with fuzzy logic, twin ned problems, and decision support in health cargon. He has published a lot(prenominal) than 30 papers in professional journals often(prenominal) as foreign ledger of electronic foodstuffplaces, mesh research, Fuzzy Sets and Systems, europiuman Journal of Operational Research, oversight Sciences, Academic Medicine, aesculapian Decision Making, International Journal of Human-Computer Systems, and others. average Archer holds the Wayne C. Fox Chair in Business Innovation, and is a Professor of circumspection Science and Information Systems in the Michael G.DeGroote School of Business at McMaster University. His research interests be in topics that relate to eBusiness, including bil let in-to- concern implementations, intelligent agents, and the human-computer interface. He has published in a occur of journals, including internet Research, International Journal of Management Theory and Practice, IEEE doings on Systems, Man, and Cybernetics, International Journal o f Human-Computer Studies, International Journal of Technology Management, and others. 1. Introduction What is brisk commerce?Is it just hype? Al roughly every fellowship in tele intercoursemunications is trying to figure out what m-commerce really is, and how to exploit it. From the tradeers vision, in the brand- spick-and-span knowledge empyrean presented by m-commerce, consumers give the sack function their carrel reverberates and other radio inventions to acquire practiseds and run just as they would over the net exploitation their mortalal computers (PCs). Specifically, m-commerce is more or less pith sales talk ( nonification and reporting) and doings (purchasing and selective cultivation entry) on nomadic braids (Leung and Antypas, 2001).Unfortunately, in reality, m-commerce is a lot a super thwarting experience. patience observers attri hardlye this drawback to the im maturity of winding applied science, nevertheless they recall 3G (third gen eration radio receiver digital cadreular tele think technical schoolnical schoolnology) ne 2rks could change the accompaniment (Cohn, 2001). While m-commerce is still in its infancy, compound devices and entanglements atomic number 18 irrelevant unless m-commerce actions ar compel and holdr friendly. Most often m-commerce is unders as closely asd as busy e-commerce (Donegan, 2000 Schwartz, 2000 Liebmann, 2000).M-commerce is supposed to change us to buy everything from everywhere over the profit without the intention of a PC. net income gravel and net browsing is presume to be the key to ex flowing m-commerce to guests (Harter, 2000). In umteen elans, m-commerce is the continuation of e-commerce with the palm handheld, piano tuner laptops and a new generation of meshing-en satisfactory-bodiedd digital hollos already on the mart (Keen, 2001). olibanum it was once believed that if you brought together roving communications and the Internet, two of the bulky gest things in telecommunications, at that place would be an ecclesiastic explosion of harvesting.However, it has non chokeed yet. In galore(postnominal) styles, m-commerce and the receiving set Internet adjudge been the victims of over-excited guess (Darling, 2001). Among 1,700 the gigantic unwashed surveyed in Spring 2000 by Jupiter communication theory, the majority say that they would non part nor pay for the wireless Web (Lindsay, 2000). WAP (Wireless practise Protocol) function were disappointing, especially in northerly Europe countries, where spry communications ar more or less pass on and consumers know headspring the limitations of the wireless Web (Monica, 2000).Consequently, the enthusiasm that earlier greeted the concept of the smooth Internet has waned. perverse to conventional perspectives on m-commerce, forward- thought marketers should not enamour m-commerce as e-commerce with limitations, but or else as wireless in its confess rum m etier, with its avow unusual benefits (Cotlier, 2000). Even though wireless engine room is any(prenominal) sentences opi enquire as an enhancement tool alternatively than a brand new medium (Ramakrishnan, 2001), productive romanceers in the m-commerce market space must treat a much broader get by across of the technology, the market, and potential consumers.M-commerce is not alone a new scattering channel, a alert Internet or a military reserve for PCs. Rather, it is a new aspect of consumerism and a much more indi dismisstful course to communicate with customers. Obviously, volume entrust not shop with their predicts in the same way they shop with PCs. Unleashing the evaluate of m-commerce take ups understanding the situation that mobility plays in peoples lives nowadays. That calls for a radical shift in thinking (Nohria and Leestma 2001). In this paper, we leave aloneinging local anaestheticize movement forces for the achievement of m-commerce.To clarify the character of m-commerce, we discuss virtually(prenominal)(prenominal) key differences among m-commerce and Internet-based e-commerce. Based on this new perspective of m-commerce, we identify a set of key factors that should be considered by marketers as easily as consumers in making decisions concerning m-commerce applications. Finally, we shoot for that the synergy of three control forces result submit to a greater handlelihood of victor for m-commerce. 2. appoint differences mingled with m-commerce and e-commerceAs we argued, m-commerce is not solely an extension or a subset of e-commerce. In fact, in that spatial relation exist fundamental differences betwixt m-commerce and e-commerce in terms of their origins, technologies and the nature of the religious function they whoremaster offer. 2. 1 Origin The egression and bewilderment of e-commerce was due to the rapid emersion of the Internet. The Internet originated from several U. S. government- sponsored programs (ARPANET, CSNET and NSFNET, etcetera aimed at providing a networked computing environment for researchers (Kalakota and Whinston, 1996).Starting from the early 1990s, the Internet was panoptic to argument community applications. With such(prenominal)(prenominal)(prenominal)(prenominal) great line potential and rapid ripening to billions of go forrs, the term electronic commerce was coined, and e-commerce applications expanded rapidly (Turban et al. , 1999). Because of all-embracingly-expanding networks and nearly dislodge chafe to the Internet, e-commerce bridges distances and enables companies to display and rat goods and go cheaply to consumers and backupes around the world.In the Internet world, much is given away barren or at a neglect in the hope that a way go forth steadytually be set in motion (presumably done denote income) to turn barter into profits. Contrarily, m-commerce is rooted in paid-for overhaul in the private vigorou s phone labor where rail line competition is stiff. In the telecom world, users pay for air clock time, by the size of the selective cultivation packet transmitted, and by the receipts utilise for what they get (Fox, 2000). globular wireless networks argon segmented and owned by contrary winding instruments such as AT&T, Pacific Bell Wireless, Vodafone, O part, Deutsche, NTT DoCoMo, etc.Comp atomic number 18d to more or less dethaw Internet access, high monetary evaluate has been seen as a major trait of m-commerce (Shim and Rice, 2001). peregrine communication done prison jail cellphoneular telephone phones is existly, and any(prenominal) extra serve go away cast extra charges. The reason is that establishing a expeditious communication network requires heavy p atomic number 18ntage investment with no government support (Ramakrishnan, 2001). M-commerce carriers therefore must look for a great traverse of business action to generate r veritable(a)ues th at justify the huge radical investments (Lamont, 2001).Due to their varied origins, the customer bases of m-commerce and e-commerce argon quite a divergent. Researchers and university educators were the early users of the Internet. The Internet user existence was originally dominated by highly educated people. As Internet mansion penetration increases, the demographics of users continue to shift impendent to those of the population at large (Pastore, 1999). This growth pattern is clear in U. S. and black markets to be repeating in the rest of the world (http//cyberatlas. internet. com/ big_picture/demographics).In discriminate, other than business users, most cell phone users be young people or relatively less erudite consumers. all over the following(a) decade, billions of people go out gain access to nomadic devices, but more an(prenominal) of them volition be functionally illiterate and technologically un sophisticated users (Feldman, 2000 Barnett et al. 2000). Because of their differences in background, consumers tend to conduct quite variant expectations for m-commerce, comp ard to e-commerce. For example, one reason for the low usance of the wireless Internet in the U.S. is that most Ameri mountains already are familiar with the wire Internet and expect to pay for wireless Internet access as they do for wired access unlimited access for a flat monthly tippytoe (Fox, 2000). 2. 2 Technology The Internet, the fundamental base of e-commerce, adopted a substantially-established protocol, TCP/IP (Transmission Control Protocol/Internet Protocol), which solves the orbiculate internetworking problem and ensures that computers communicate with one some other in a reliable fashion. Over the past everal courses, the World Wide Web (WWW) has come to dominate Internet traffic, and the ample majority of e-commerce applications are Web-based. It is in any case open to connect the Internet with existing business learning systems. Uniform I nternet measurings importantly reduced e-commerce entry bes and assistanceed render the rapid growth of e-commerce. In contrast, m-commerce work are constrained by a variety of wireless media communication normals ranging from world(a) (Satellite), regional (3G, IEEE 802. 11a/b, DoCoMo I-mode), to short distance (Bluetooth) (Shim and Rice, 2001).Cellular carriers use distinct systems and standards such as GSM (Global measure for wandering(a)), TDMA (Time Division three-fold Access), and CDMA (Code Division Multiple Access) to compete with apiece other (Leung and Antypas, 2001). M-commerce applications tend to be device and carrier cypherent. The wireless applications today chiefly use two technologies WAP and SMS. WAP (Wireless natural calling Protocol) is the display language knowing for cellular handhelds. It was created by Motorola, Ericsson, Nokia and Phone. com in 1997 when they founded the WAP Forum.WAP is a derivative of the XML/HTML language family, but it i s designed to operate without a keyboard or mouse. SMS (Short Message Systems/ serve) is a derivative of the old numeric paging network, with spare functionality for nonpartisan communication and support for text and attachments. there are more users of SMS today than of WAP, thank to cheaper utility and the far-flung avail superpower of low- represent, bipartizan paging devices from companies such as Motorola (Leung and Antypas, 2001). Until now, there has been no generic world-wide framework and standard for application railment using normal meandering(a) touch modality and access.In fact, wireless technology is still in its infancy and hindered by limited coverage and a diverseness of competing standards, which give the axe explain the slower-than- pass judgment adoption of m-commerce in the United States (Shim and Rice, 2001). Choosing from conflicting standards, products and features, gives level inured technophiles a headache. The pyramid of m-commerce applicati ons thereby presents a much more complicated process, in which many pieces must fall into place before the erratic phone plunder be seen as a real r pull downue generator.In addition to underlying networking root word and standards, it is the client devices that rattling determine what special operate loafer be standed. The big H in e-commerce applications is actually due to the far-flung use of PCs, which have a cope text input keyboard, large screen, lusty remembrance, and high touch on power. Contrarily, various m-commerce applications swan on the use of handheld devices. These devices localise from pagers, cell phones, and palmtops, to pocket PCs.Mobile devices such as cell phones and PDAs ( person-to-person Digital Assistants) have diminutive screens, some of which display lone(prenominal) three lines of text at once (Lucas, 2001). The displays are black and white with low liquidation there are no QWERTY keyboards, and no support for animation (Leung and Anty pas, 2001). Although WAP devices support a limited graphics format called Wbitmap, because spry devices have limited bandwidth and pocket-sized screens, any application that is heavily graphic or animation driven would not be suitable at this time.In addition, semi software program applications are relatively crude. There are no cookies or session controls, meaning that if the joining is lost, the application will restart earlier than continue from previous screens (Leung and Antypas, 2001). Web browsers and drop-down postings are un open, so companies must plan on character-based terminal applications with cursors and key entry forms. extensive selection lists or deep menu shapes will wear out the fingers of raze the most patient users (Moustafa, 2000 Jainschigg and Grigonis 2001).However, in contrast to PCs, cell phones do have their own unique features mobile, portable (small size), smooth articulatio communication, and machine-accessible to someones (primarily becaus e of portability) rather than to internal base or office. 2. 3 The Nature of improvements The wide accessibility of the Internet makes any e-commerce service globally available. The Web enables search and auction pitch of enough breeding, and sophisticated electronic transaction processes understructure be integrate comfortably with backend enterprise discipline systems.In contrast, the delivery of m-commerce applications relies on private wireless communication carriers. These run are usually delivered to a unique(predicate) region, and are rather undecomposable, more ainized, localization principle-particular proposition and time-sensitive. Since a mobile device usually accompanies a person wherever he or she goes, mobile services stick out be delivered to a person anywhere and anytime rather than to a dictated office or home. M-commerce therefore creates more of a intuition of enhanced intimacy with consumers than other office-based distribution channels.Time se nsitive, simple proceedings such as movie ticket purchases, banking, and travel reservations are believed to be the key applications that will percolate m-commerce (Lucas, 2001 Swartz, 2001-2). Other key drivers to m-commerce growth are situation-based applications such as traveler navigation, catch response, etc. (Secker, 2001 Rockhold, 2001 Swartz, 2001-1). Finally, in general we reason Internet based e-commerce into B2C (business to consumer) and B2B (business to business). The rapid growth of e-commerce started from the booming of dot. com companies aimed at online shopping and customer services.Gradually, the emphasis shifted to B2B, and more recently e-business, to bring reward of the real business tax of the Internet. In contrast, mobile commerce started from person to person communication, and gradually more services were introduced through interactions between people and systems checking the weather, determination a local restaurant, etc. M-commerce applications s tooge be utilise to serve some(prenominal)(prenominal) consumers and business people. Rather than apply B2C and B2B classifications to m-commerce, P2P (Person to Person) and P2S (Person to System) would be more detach to spokesperson communication the nature and trend of m-commerce applications.The details of m-commerce applications will be discussed in the next section. The major differences between m-commerce and e-commerce are summarized in dodge 1. knock back 1. Major Differences Between M-commerce and E-commerce E-commerce M-commerce ORIGIN Sponsorship Government-sponsored Internet Private mobile phone exertion Business entry exist premiere gear High customer access bell Free or low comprise Internet access High mobile service charge Customer base super educated computer users little educated cell phone customers engine room Message transmittance Packet-switched instruction transmission Circuit switched for streamlined section com munication Protocol TCP/IP, HTTPML GSM, TDMA, CDMA, 3G Standardization Highly standardized Multiple incompatible standards Connectivity Global primary(prenominal)ly regional Bandwidth High let out Identity URL with IP and domain name Phone number Application development General computer applications Device- particular(prenominal) applications port wine device Personal computers Cell phones and PDAs Mobility restore location Mobile Display boastful screen Small screen Main input mode Keyboard for full text input Voice with small key pad Main output mode Text and graphics Voice with small text display Local rocessing power Powerful CPU with large memory and disk space Limited processing power with small memory chip Software and Programming Support a variety of programming languages Java or limited script languages Trend Towards ordinariness Towards minimization SERVICES Service range Global Regional Delivery end point PC in office connected to the In ternet Person accompanied by a mobile device transaction complexity Complete and complex transactions Simple transactions Information stick outd overflowing info Simple and short messages quantify Less time- hypercritical Time critical Location-based service No Yes Target mobility Service to a fixed point Service to a touching pose Backend business connection Strong connection to backend business development Weak connection to backend business discipline systems systems Service classification B2C (business to consumer) and B2B (business to P2P (person to person) and P2S (person to system) business) 3. Key Factors in Designing M- concern ApplicationsOnce we have set the major differences between wireless mobile communication based m-commerce and Internet based e-commerce, we can identify the key factors that must be taken into consideration in pattern fosterful m-commerce applications. 3. 1 Mobility M-commerce opportunities can be very significant, if inves tors understand consumer groups intimately and develop ubiquitous solutions that recognize the role that mobility plays in consumers lives (Nohria and Leestma, 2001). In business services, not beingness forced to be hardwired enables a fraternitys employees to remain connected opus moving from office to office, or province to state they can tap into the unified network from airport lounges and hotel lobbies.For individual consumers, mobile devices elementaryally allow them to confirm in touch with their friends and families anywhere and anytime. For instance, characterizationphone users can take pictures wherever they go and send them affiliated with short notes to friends while shopping, traveling, or simply hanging out (Kunii, 2001). Beyond person to person mobile communication, additional note value can be generated by linking mobile consumers and existing services. Mobile consumers can access various services anytime and anywhere, presenting new market channels for bu sinesses. While traveling, a user may use a mobile phone to control a home burglar or fire disquietude system and to turn lights on or off as if at home (Fox, 2000). 3. 2 Personal identity and strengthened in requital implementsSince mobile devices, in particular cell phones, are registered by their contributors and comm save ac caller the person, it becomes feasible to identify and deliver individualise services to the user. A cell phone with additional protective covering information such as a pin down number or biometric identification technology can be used to identify a person. A payment mechanism may alike be strengthened into the cell phone system. It is then feasible to allow consumers to use their wireless phones as devices to make or trigger a payment (bus ticket, vendor machine etc. ), similar to the use of a quick batting order or an ATM machine. And there are even a a few(prenominal) vending machines that let users pay for soft drinks using their cell p hones (Fox, 2000). Credit display panel numbers could also be replaced by cellular phone numbers for wireless transactions.Relying on a third caller payment mechanism is always a big hurdle for Internet-based e-commerce because an IP book of facts cannot identify a person. However, this difficulty could be easily overcome in m-commerce with the use of an identifiable mobile device. Hence, cell phones by nature support e-Wallet applications in m-commerce, which is crucial to the victory of other applications. Certainly, systematic earnest solutions involving PKI (Public Key root) and biometric services should be adopted as salubrious (Young, 2001). As an example Obongo has modified its e-wallet software for use on wireless devices. A so-called m-wallet contains the brainpowerholders deem information, name, and mailing address, and is accessed with the push of a button.Once opened, the info indoors the wallet are transferred to the merchandiser to complete the payment ( Lucas, 2001). M-wallets make micro-payments easier and help carriers charge for advanced services such as digital media and game applications that consumers cannot get any other way (Swartz, 2001-2). as well pecuniary services, personalization in m-commerce can migrate into enjoyment (music and games, etc), suffice services and even personalized merchandise. Since mobile operators maintain personal information on bearrs, a CD vendor, for example, could simply ask customers to verify payment information and a expatriation address through their cell phone displays rather than have them fill out forms each time from scratch (Barnett, et al. 2000).Good potential applications of the content r maturation are personalized software that deliver highly targeted offers for large- or small-ticket items that consumers can act upon, even while wait in line (Lucas, 2001). 3. 3 Location-Based Services To date location-based services have been regarded as key enablers of m-commerces future triumph, tally to the current hype (Swartz, 2001-1). Portable geographical positioning systems (GPS) are becoming small and more affordable, at costs in the neighborhood of only round U. S. $200. These systems can be used not only to identify locations, but also for business to deliver location-sensitive services to users. The ability to target rich and relevant information to end-users give ups great potential value in location-based applications.For instance, it would be quite useful to provide campaign directions and local commercial services where users happen to be, such as near specialized restaurants, movie shows, bus schedules, weather reports and channelize tours in museums (Shaffer, 2000 Taaffe, 2001). Hence, one of the selling points of m-commerce applications is proximity. Go2Systems, in Irvine, Calif. , one of a swarm of vendors eyeing the uses of ALI (automatic location identification) information, linked with Coca-Cola to steer wireless customers to stores selling change state products (Jones, 2000). Coca-Cola, the worlds best-known brand, has ventured into the wireless world by providing its rise clients (McDonalds, Burger King and more than 800,000 U. S. estaurants) with the opportunity to soak up additional business by placing their call on Go2 Systems wireless services. Their 5-year, U. S. $30-million deal will allow customers to find the nearest Coke fountain location through their cellular phones with Go2 location-based direction services, which include addresses, turn-by-turn directions and one-click commerce (Swartz, 2001-1). CT movement, a location-based services developer, provides an m-coupon application, by which the mobile user can receive an electronic coupon from a seller in his or her particular(prenominal) location (Secker, 2001). calculate that a young teenager is locomote his skateboard through the park on a Saturday afternoon, when his cell phone beeps.It is a message from the Soda X entre that the loca l professional soccer group is playing tonight, and the store that he is coming is offering him half-price tickets for the game if he buys a pair of jeans today. Privacy concerns are critically important while implementing location-based advertising. realise mode may resolve the emersion of privacy, when a mobile user quests information and is volition to receive an advertisement (Secker, 2001). However, many location-based applications are still to be highly-developed few carriers have a strategy, let alone a business deterrent example (Swartz, 2001-1). Location-based services would have to be targeted highly well, in order to avoid damaging trusted relationships that merchants already have with customers.Location can be shaded not only for people but also for other objects. Cellpoint, a supplier of location-based services (LBS) software, provides the applications used to drop back remote control assets such as surpass vehicles and construction equipment, and also provid es telemetric products that allow remote machine-to-machine communications (Secker, 2001). It is also possible to trace a stolen car or a missing child that is stakeing a specially designed radio device. 3. 4 Time-critical liking purchasing Mobile phones are carried by their owners almost everywhere and kept switched on most of the time, especially in Europe, where mobile users are not supercharged for launching calls.Consumers can thus not only gain access to wireless services wherever there is a network presence but also withstand tabs on time-critical information such as stock market reports or imperative messages. Time-sensitive and simple transactions are other key to stimulate m-commerce. For some applications of m-commerce such as scanning news or purchasing books or other retail items, real-time transactions are not necessary. Nonetheless, there is a great deal of value in being able to monitor dynamic information through wireless handheld devices, such as aircraft fl ight status, shipping status, seat reservations or stock prices, and to alert the user when the information is updated (Shaffer, 2000 Schwartz, 2000 Leung and Antypas, 2001).There will be even more value in essential situations such as medical care, traffic accidents, emergency road service, and offensive reporting. Particularly with the mandate ALI (automatic location identification) entropy supplied by a few key vendors such as Xypoint, U. S government emergency systems like E911 (Enhanced 911) could be reformd (Jones, 2000). The United States FCC (Federal Communications Commission) mandates that the location of wireless callers be place during a 911 emergency call. The MapInfo (www. mapinfo. com) Location Management Platform (LMP) is used to enhance a carriers 911 service by automatically routing 911 calls to an appropriate Public Safety Answering draw a bead on (PSAP) for handling and dispatch. 3. 5 Special market place NichesMass-market consumers will be the really big users of m-commerce applications. And the customer base is large teeming for potential receipts in the medium to long term (Sweeney, 2001). A mavin sea wolf application would not work for everybody and there is going to be a whole set of niche applications that are relevant to each target audience. The mobile industry believes that location-based service advertising will have stimulated m-commerce so much that operators would eventually offer free phone charges to subscribers who are prepared to have advertising on their screens on a permanent basis. In particular, youth has a very omnipotent twist on this market (Secker, 2001).Actually, young people have been a major target of various m-commerce applications, particularly SMS and DoCoMo iMode services (Herman, 2000). at any rate focusing on youth, mobile operators also evoke marketing future mobile data technology much more aggressively to business users (Parsons, 2000). In any case, for new m-commerce opportunities, carr iers should be cautious roughly implementing applications that require changes in consumer behavior. If many technology hurdles are to be overcome, along with a equivalent unreasonable change in behavior, the application is improbable to succeed. extraly, price marketing is by far the most important in creating m-commerce value (Lamont, 2001).Mobile carriers therefore indigence to develop unique offerings for each target market segment or services targeted, concord to geographical location and demographics (Schneiderman, 2001). Learning about and analyzing customer psychology, and taking marketer perspectives would help carriers segment the mass-market and target specific to m-commerce applications. We actually get to shift our way of thinking to exploit the uniqueness of m-commerce applications that can be brought to bear in our lives, rather than to be confined to thinking within the limitations of mobile devices. The factors that need to be considered for m-commerce applica tions are summarized in Table 2.Table 2. Key Design Factors and classifiable Applications Factors Typical Applications Mobile communications (for business and personal contacts) Mobility Scheduling and coordination ( e. g. appointment arrangements, reminders, teleconferencing, etc. ) Location-sensitive Travel navigation ( control or base on balls directions) Local tours (exhibitions, shopping malls, etc) Locating local services (restaurants, gas stations, etc) Locating moving objects (missing children, stolen cars, etc) Short Message Services (SMS) Time-critical Time-critical information (flight schedules, weather reports, traffic information, stock prices) mite services (medical care, accident and rescue services, crime stoppers) Personal identification (secure entrance with biometry check) Personal identity Electronic payments (e-Wallet) personalized location-aware advertisement Language-specific services (automatically switch to or translate to desired language) Demographic partition (oriented to young people or business people). Special market niche-targeted Country part (tailored to specific country) 4. Synergy of Three Driving Forces For m-commerce growth we identify three major forces that impel its growth technology installation, evolution of new value duress, and active customer demand.We drive that the synergy of these three forces will eventually principal to the victor of m-commerce applications. 4. 1 Technology Innovation Technological raise is likely to bring about some novel applications for m-commerce. Here we identify several major technologies, improvements in which are expected to have a significant influence on m-commerce. The primary concern is with the capabilities of handhelds, the basic principle of mobile networks, the accuracy of geographic location information, and protection solutions. (1) Handhelds Low-cost, truly pervasive devices that present multi-modal information and perform transactions by nature can dramatically change what many people do and how they do it (Feldman, 2000).In the next several years, wireless devices will improve in interface design and information presentation. In countries like China and Japan, where the pen language has never fit well with a Western keyboard, handhelds that employ mitt or speech realization take care ideal (Herman, 2000). Wireless keypad mnemonics can also make the entry of data easier for consumers (Young, 2001). Subscriber identity modules (SIMs) may take over due to their competitive advantage over voice or keystroke activating (Chanay, 2001). Newer devices will use expandable mask screens undetermined of displaying up to 12 lines of text, more user-friendly keypads, and higher communication bandwidth (Lucas, 2001).Smart billhook memory capacity will lay down 1MB by 2005. The processing capability of burnished cards has increased and has given users the ability to enjoy more computationally intensive, high-value, transaction-based operations that require such features as digital signing and encryption (Moustafa, 2000). For those who crave the in the buff edge, there are DoCoMos (in Japan) awesome third-generation handhelds, which can capture and send high-quality discolour movies almost in real time (Kunii, 2001). By using a DoCoMo camera-phone, it is possible to imagine being in a store shopping for a introduce for a child and calling your married person to show her what you are thinking of buying.Besides improvements in user interfaces, applications and underlying middleware configurations will allow for interactions to switch communication modes smoothly without losing lucidness or the thread of conversation. The Java throwaway Forum has developed specifications for implementing Java on smart cards. Support of Java on SIMs will allow wireless terminals to go the Java developer community, simplifying the development of new services (Carrara, 2000). Overall, next-generat ion devices are expected to combine the functions of Personal Digital Assistants or PDAs (data exchange) and cell phones (verbal communication). (2) cyberspace infrastructure The current (second) generation of wireless networks and handhelds supports data rates of only 9. 6 kilobits per second, far below the 64 Kbps capabilities of landline copper wires.GSM (Global System for Mobile Communication), the most vulgar cellular standard, is being extended by the GPRS (General Packet Radio System), which can support data rates of 112 Kbps, almost twice the rate of a standard computer modem and enough to support high-quality blow audio. True third-generation (3G) networks, based on the UMTS (Universal Mobile Telephone System) standard, are predicted to raise the supreme rate to 2 Mbps one-fifth of the bandwidth available on the standard Ethernet in todays offices (Barnett et al. 2000) According to Ovum, 3G will first take hold in Asia and Europe, with the rest of the world trailing a year or two behind (Fitchard, 2001).Currently, the leader in the field is Japans existing second-generation, or 2G, digital networks that provide always-on connections for data transmission and support a wide range of online services from news, weather, and ticket-booking to downloads of games and ring tones (Kunii, 2001). Therefore, in the next several years, cross elements of 2G, 2. 5G and 3G will be in play simultaneously on wireless operator infrastructure. Bluetooth is a short-distance, radio-based, point-to-point technology that, theoretically, can go up to 1 Mbps, and has already entered the market (Herman, 2000). It will be very useful for enabling location-based applications. It allows a wireless device to exchange data with PCs, laptop computers, point-of-sale devices and other wired devices without being somaticly connected by wires or adapters.Bluetooth is support by more than 1,400 telecommunications and technology companies, including Motorola, Intel, and lambent Technologies (Lucas, 2001). (3) Geographic location technology Location-based personalized services have been heavily touted as a major application for m-commerce. In order to deliver such services, mobile devices (particularly cell phones) should be able to keep track of an individuals physical location as he or she moves about. Some companies are focusing on underlying technologies or services such as radio-based modes for determining where users are calling from, or software and systems that blend location data with other information (Shaffer, 2000).The FCC (Federal affair Commission) has stringent requirements for location services, in which carriers have to offer network-based systems that deliver location information with an accuracy of three hundred meters for 95% of calls and blow meters for 67% of calls (Brewin, 2001). For instance, an FCC ruling requires all wireless carriers to find a way to locate the location of the users dialing 911 emergency services. Although t he requirements are skirmish resistance from various carriers that say they cannot tally that level of accuracy or at least need more time to do so, some can couple the requirements with the portion of their networks that uses the GSM (Global System for Mobile Communications) standard. (4) certificate technology The lack of tribute is said to be one of largest barriers in delaying m-commerce implementation.In particular, security is a vital issue that affects the use of mobile technology in financial services, when account details and other privy information move across the networks (Dezoysa, 2001-2). With regard to securing transactions, PKI (public key infrastructure) is believed to be the best method to secure end-to-end transactions (Moustafa, 2000). Besides securing wireless transactions from the cell phone to the m-commerce provider, the phone must also be secured from fraudulent use. traditionalisticly, the SIM card that stores the subscribers account information is use d for identifying and authenticating the subscriber to the network. There are industry standards for SIMs used in digital wireless phones that help ensure that all SIM-based terminals can support any SIM applications and services a provider develops (Carrara, 2000).Dual chip phones even have an additional SIM-size slot for an independent multi-application chip card targeted at payment, such as a bank-issued WIM card (wireless identification module) or EMV card (a payment standard defined by Europay, Mastercard, and Visa International) and other banking solution applications (Dezoysa, 2001-2). In the near future, wireless biometric services will emerge as a common solution (Young, 2001). A biometric is a unique physical or behavioral characteristic of the human body, which may be canvas automatically. The absolute verification of a user makes biometrics the highest security level. Biometrics come in many forms.In 2000, reproduces were the most astray used biometric, accounting for 50% of the market, followed by hand geometry (15%), face recognition (12%), voice recognition (10%), handwritten signature recognition (8%), and iris scan (4%) (Biometric Industry news report, 2001). In recent years, biometrics have departed digital, and modern electronic systems are capable of distilling the arches, loops and whorls of conventional fingerprints into a numerical code. As an example, Champion Technology, a Hong Kong company, has launched a fingerprint recognition system, which takes only a few seconds to accomplish recognition (Leary, 2001). Biometric authentication offers some promise of strong and convenient security for cell phones, in which the subscribers signature or fingerprint can be thought of (mathematically) as a large random number (Crowe, 2001).These are easy for the owner to present to a machine but difficult for others to fake, and they cannot be lost, stolen or borrowed. The growing m-commerce industry eventually will settle on a set of solutions t o all of the different security problems, building end-to-end solutions that are secure, cost effective and easy for consumers to use. However, successfully implementing good quality solutions relies upon the acceptance of standards (either de facto or negotiated) within the highly interdependent functions of this industry. 4. 2 cheer Chain Evolution As we discussed above, m-commerce is primarily rooted in the cash-rich mobile phone industry.Therefore, equipment vendors and network operators have been dominant in the m-commerce world. And in some sense, the mobile operators own virtually all of the value chains (Donegan, 2000). Unfortunately, this operator-dominated value chain is not able to successfully deliver flawlessly integrated personalized services for mobile phone users, which is crucial to the success of m-commerce (Swartz, 2001-2). In theory, mobile operators could compete at all levels of the m-commerce value chain, from the provision of basic technical services to the supply of lucrative, customer-facing content, but this is simply not possible, since this will spread their skills and resources too thin.This has been abundantly demonstrated in the e-commerce marketplace, where different companies tend to invest and to focus on their specific expertise at particular levels of the value chain. There are some exceptions, where dominant companies such as Microsoft and General galvanising attempt to extend their reach vertically. Companies usually should concentrate on areas in which they naturally hold a competitive advantage. In m-commerce, mobile communication operators thus need to make difficult decisions about which move of the value chain to compete in and how and which parts to avoid. There are many critical roles that they may be able to play and a number of business models that may be suitable in these roles (Tsalgatidou and Pitoura, 2001).Some mobile data industry observers believe that, although Europe has a more advanced mobile co mmunication infrastructure, the European advancement to the m-commerce market will fail (Darling, 2001). They suggest that many European service providers privation to own the customers and to support all the applications that customers emergency to perform. Some mobile operators may even want to become banks or content providers in their own right but, even though carriers have all the critical capabilities in place, including location, shopping, e-wallets, promotion and personalization, without partnerships with knowledgeable merchants and intermediaries, prospective customers will have nothing to access. Therefore, partnerships between -commerce providers, interested content providers, and other businesses are critical to the success of m-commerce. Providing complex data services is a very different business from running a voice network, so carriers have to choose partners to provide content, and decide which services to offer their customers. In pursuing value-added services, more entrepreneurial companies have the products and capability to get them integrated and delivered to handhelds (Goldman, 2000). Also, since capitalizing on the promise of m-commerce requires an in-depth understanding of consumer behavior, significant opportunities near not just for providers of telecommunications services, but also for companies that have a rich and constitutional knowledge of consumer behavior.However, from the merchants point of view, building m-commerce applications will present huge challenges, so companies need to leverage superior consumer insights to develop powerful branded solutions with value outside their traditionalistic markets, particularly when forging alliances with telecommunications carriers (Nohria and Leestma, 2001). In a value chain, each party plays its specific role and gets its own benefits. Customer service charges depend on how much value the user receives, so there will be different pricing and business models for individual service s (Secker, 2001 Darling, 2001). Revenue manduction in m-commerce value chains, particularly in those of location-based services (LBS), involving mobile operators, equipment vendors and application developers, will require a significant make out of negotiation. As an example, CT Motion is an LBS application developer and equipment vendor, providing operators with a broadcast to enable deploying and managing LBS.CT Motion licenses its platform to operators, with an initial fee to cover basic hardware costs and licensing. Additional payments to CT Motion depend on the tax stream from application users. Thus, receipts share will essentially depend on the value of the application. For example, a company delivering a car theft convalescence service is doing most of the work and so it might receive 95 percentage of the revenue. For a simple application, the majority of the revenue will go to the operator and the platform enabler (Secker, 2001). In Table 3, we list the roles in an m- commerce value chain, the major players, and their corresponding sources of revenue. Table 3. Roles and Profit Sharing in the abide by Chain Role Tasks Major players Sources of revenue Equipment Supplier Manufacturing innovative handhelds and Nokia, Ericsson, Motorola, etc Selling phones, equipment, or equipment sharing revenue with network operators for discounted cell phones Network Operator Developing and maintaining Traditional carriers such as Charges from increased network infrastructure to support mobile data Vodafone, Orange, Deutsche traffic communication Telekom, AT and NTT DoCoMo Service Hosting Providing basic enabling services such Existing Web-hosting companies Shared revenue with application as server hosting, data backup, systemsand system integrators such as providers integration and security control Oracle Portal provider Offering simple, categorized Internet door service providersFees charged to application information search facil ities crucial such as Freeserve, AirFlash, carriers and advertisers to m-commerce applications. Room33, Microsoft, Yahoo, AOL emailprotected Billing Handling various sophisticated illing Network operators such as Transaction fees or interest Facilitator mechanisms such as air-time-based, userVodafone, Orange, Deutsche charged to merchants or consumers patterns-based, specific Telekom, AT, NTT DoCoMo and application-based, location-based, etc banks and credit card companies Application supplier Providing various end-user services Existing Internet content Revenue from customers for such as ticket booking, e-mail providers such as Yahoo, AOL and services or products purchased checking, news scanning, and retail merchants (Coca-Cola, location-based services (LBSs) PepsiCo, Procter & Gamble, etc) To help observe the maturity of the various value chain components of m-commerce defined in Table 3, and to understand where provided development must occur, it is inf ormative to consider the inter-corporate linkages of m-commerce. This can be done tally to corporate contributions to required infrastructure, associated support services, and delivery of these services to customers. To this end, we have adapted the known University of Texas e-commerce model of Internet Economy Indicators (Whinston et al, 2001). In their model, there are four-spot layers (Internet infrastructure, Internet applications infrastructure, Internet intermediary, and Internet commerce).M-commerce differs significantly from e-commerce, as we have pointed out, although there is some circuit in the functional nature of both. In our m-commerce value chain model, we also propose four layers 1) Communications Infrastructure, 2) Applications Infrastructure, 3) M-commerce Intermediary, and 4) Mobile Commerce. employment from the top of Table 3, the Communications Infrastructure layer includes equipment suppliers and network operators. The Applications Infrastructure includes service hosting, portal providers, and software companies that develop relate software products and platforms. The M-commerce Intermediary layer includes commission facilitators, content providers, brokers, and market makers.Finally, the Mobile Commerce layer includes application providers that sell goods and services to customers. The interconnected and interdependent nature of these four layers of the value chain cannot be over-emphasized. Thus evolution in one layer will affect the other layers. For example, advances in the communications infrastructure, such as the widespread implementation of G3, will support new developments such as wireless video and bring more potential retail applications of mobile commerce that may be both time and location sensitive. barely services to support these will require further evolution in both applications infrastructure and intermediaries. 4. 3 Active Customer DemandWhat is missing from m-commerce is compelling content that will make peopl e want to use their handhelds to buy something. Consumers remain unconvinced about the wireless Web and user apathy towards wireless data services is believed to be one of the main factors delaying m-commerce implementation (Kelly, 2001). We propose that it is current narrowly-focused m-commerce applications (mainly on mobile Web systems) but not the fundamental nature of m-commerce, that frustrates consumers. The great advantage to people of eliminating fixed attachments to physical space, allows more strategic, creative, and flexible decisions and actually getting things accomplished (Kalakota and Whinston, 1996).Instead of waiting for grampus applications to stimulate passive consumers, we propose that fundamental consumer demand is the active force that can improve the chance of m-commerce success. The success of the cell phone industry has already proven the significance of this active driving force. nowadays there are an estimated 115 million cellular phone users in the U. S. (Schooler, 2001). Market growth has been quite encouraging. Compared to the U. S, in Asia and Europe mobile telephony adoption is even more advanced (Herman, 2000). In Japan, the number of cell-phone users has already reached 66 million (Kunii, 2001). 64% of the people in Finland have a mobile phone, while the rate in Sweden stands at 55. 2% (Kruger, 2000).In China, the enthusiasm for mobile phones has exceeded all forecasts, and the mobile subscriber base will probably reach 250 to 300 million in 2005, up from 68 million in 2000 (Sliwa, 2001). Recently, the population of cell phone users in China has reached cxxxv million, making it the world leader. Beyond enjoying the basic service of mobile verbal communication, consumers are beginning to demand much more from their cell phones. Two-thirds of Japans cell-phone users subscribe to one of many mobile data services offered by the countrys three cellular operators. Even though the actual demands vary according to different geograp hical locations and demographics, consumers have played a decisive role in the success or failure of m-commerce efforts.Most potential m-commerce successes will arise from consumer demand for additional value in their daily lives, and there is unlikely to be a single killer application that can spark m-commerce success. What consumers need is an adaptable package that can pacify various m-commerce services (personalized location-specific and time-sensitive). It is the variety of cost justification criteria adopted by consumers (in turn determined by demographics, regional cultures, current fashions, etc. ) that fundamentally affect their decisions concerning specific m-commerce services. According to a Nokia research study that focused on m-commerce services in the U. K. South Korea, Italy, USA, Brazil and Finland, the proportion of respondents that would carry out a transaction of more than U. S. $25 using a mobile device, ranged from 24 to 54 percent (Dezoysa, 2001-1). Also, 90 p er cent of all end-users surveyed that would consider using m-commerce, either now or some time in the future, would be willing to pay for its use. However, this is on the assumption that the mobile device is free. It is still uncertain whether the cost of next generation phones can be subsidized by operators and, if they are not, how the added cost of paying over $150 for a mobile phone might well affect this figure (Dezoysa, 2001-1). DoCoMo recently sell about 10,000 videophones at a U. S. $ calciferol price, with service limited to Tokyo (Kunii, 2001).In Europe, the cost of providing advanced handhelds equipped with high tech features is also likely to be in the neighborhood of $500 or more (Carrigan, 2001). For the additional cost of high tech handhelds to be acceptable, consumers will expect to be able to access many additional services that are of value to them. In Europe, where mobile users are not charged for incoming calls, consumers can thus not only gain access to wireles s services wherever there is a network presence but also keep tabs on time-critical information such as stock market reports or other urgent messages (Barnett et al. 2000). Such consumers are more likely to take advantage of these services.The focus in m-commerce needs to be on delivering simple, time-sensitive, and compelling applications that do not require a lot of training. If it takes too much time (e. g. more than 5 minutes) to conduct an m-commerce transaction, it might as well be done with a PC. iodin example is notification about tickets to entertainment and sporting events. A consumer can contact a ticketing agency, such as TicketMaster, to request notification of availability of tickets for sale for an future concert. When tickets meeting the consumers criteria become available, TicketMaster sends a message to the consumers wireless device and asks if the consumer wants to buy them or not. This is a simple yes-or-no transaction (Lucas, 2001).Any applications that requir e consumers to input much information will not work, because of keyboard limitations. For example, a visit to Barnes & Nobles WAP target to enter credit card number, address, and shipping information requires more than 100 keystrokes (Swartz, 2001-2). 4. 4 Synergy of three driving forces The success of m-commerce relies on the synergy of three driving forces technology innovation, value chain evolution and active customer demand. Technology innovation provides more useful functions with lower prices, creating value for customers and stimulating customer demand. Technology innovation also demands high-level collaboration through the value chain.Active customer demand provides rich revenue sources for the value chain and stimulates technology innovation and the development of new applications. order chain evolution ensures the collaboration of eight-fold parties through appropriate profit sharing, which in turn supports more technology innovation. finished positive interaction loo ps the three driving forces will eventually contribute to the success of m-commerce. This synergy is graphically illustrated in work 1. 5. Conclusions Are we ready for m-commerce? Differing perspectives of m-commerce may lead us to opposite answers. But our research into the nature of m-commerce shows that m-commerce applications are fundamentally different from those delivered in the Internet- based e-commerce environment.Simply transforming e-commerce services to cell phones or PDAs will merely demo the limitations of wireless handhelds and result in frustrating end-user experiences. Therefore, as we examine any guessing about m-commerce applications, we must attempt to exploit the unique features of mobile devices as well as to avoid their weaknesses. Furthermore, the eventual success of any m-commerce strategy depends on the synergy of the three driving forces we have identified technology innovation, value chain evolution, and active customer demand. Acknowledgement This res earch was sponsored by the research grant from Natural Science and Engineering Research Council of Canada.The authors are pleasant for the anonymous referees constructive comments and valuable suggestions on the improvement of earlier version of the manuscript. References Barnett et al. (2000), ding Barnett, Stephen Hodges, Michael J. Wilshire, M-commerce an operators manual, The McKinsey quarterly New York 2000, No. 3, pp. 162-173 Biometric Industry Report (2001), 2000 Market Review, Biometric Technology Today, Jan. , pp. 9-11. Brewin, (2001), phellem Brewin, M-commerce hits snag as cell carriers encumber, Com