M-Commerce Represents Potential Yet Not Immediate Opportunities for Carriers - Brief Article

Wireless Internet, July, 2001

For wireless carriers eager to recoup the costs of building next-generation wireless data networks, mobile electronic commerce (m-commerce) will represent new revenue streams, according to Cahners In-Stat Group. However, the high-tech market research firm finds that early growth of the mobile commerce market will be slower than has been widely projected.

The reasons for this slower growth include user apathy toward wireless data services, slow buildout of next-generation wireless networks, slow development, and limited availability of m-commerce services outside of Japan, Europe, and the US.

"Much of the hype surrounding m-commerce, from potential revenue to the number of people that will become m-commerce users is just that -- hype," said Ken Hyers, senior analyst with In-Stat's mobile commerce service.

While mobile commerce will have its place in the wireless world and will be worth billion of dollars in revenue within the next five years, In-Stat believes that projections that claim hundreds of billions of dollars greatly overstate the value of this segment.

"Users are not enjoying a wireless Internet experience that even remotely compares to the wired one that millions experience every day. More to the point, very few of the people that are currently linking to the Internet via wireless devices are buying books, CDs, or computers (all big e-commerce sellers). More often than not, wireless data users are sending short messages to each other or checking sports scores or stock prices on their mobile phones," said Hyers.

In-Stat also found that:

- A survey of current wireless Internet users found that 45 percent had purchased products using their wireless Internet service. Of these users that had made an m-commerce purchase, 60 percent has done so for both personal and business reasons, while only nine percent had made business only m-commerce purchases.

- One of the top selling m-commerce categories were business tickets, such as airline tickets. Services that cater to mobile professionals, such as reservation services will likely be early m-commerce winners in the enterprise space.