M-commerce applications for small mobile devices may be limited today, but market researchers predict a rosy future. Meanwhile, Wap phone users have mixed opinions, by Joia Shillingford

As people with web-enabled mobile phones already know, what you can research or buy on the move is still fairly limited. But owning one of the new Wireless Application Protocol (Wap) phones still has a certain cache.

Jim McCafferty, head of European telecoms research at Société Générale, uses his Wap phone to check share prices. And Nick Parker, managing director of web site developer Horizon, says: "Wap is really useful for picking up news headlines at the end of the day from the BBC or from Guardian Unlimited on BT Cellnet's Genie site."

Andrew Moffat, telecoms analyst at ABN Amro, uses his Wap phone to track intraday movements on the technology-driven Nasdaq market in the US. He looks at US indices on Stocksmart's site, and at cinema listings on Excite.com.

He says: "The only problem with the cinema listings is that they don't give the phone numbers or the time when the films are showing. But if you click on, say, American Beauty, it will give you a plot synopsis which is great."

r Moffat also looks at news on his Wap phone. He says: "Independent Digital News give you the whole story; the problem with the BBC site on Vodafone is that you just get the first two paragraphs of the story, then it refers you to the BBC's full internet site. But if you were near a PC, you wouldn't be using your mobile.

"In Portugal, where network operator Optimus has just launched Wap, you can do things like read a restaurant review, hit a button and be put through to that restaurant straightaway."

r McCafferty says: "A real limitation right now is the lack of Wap content."

In Scandinavia, however, mobile users have more choice. In Finland, m-commerce services include a secure mobile stockbroking service at the Helsinki stock exchange launched by Sonera SmartTrust in partnership with eQ online, and mobile banking with Leonia Bank in Finland.

SmartTrust also signed a deal with the Finnish government in January to develop a form of electronic ID that will effectively be a mobile passport.

-commerce applications for small mobile devices may be limited today, but market researchers are predicting a rosy future.

Datamonitor forecasts that consumer spending (on goods only) via m-commerce will be worth $16.6bn by 2005.

But Karl Hicks, author of a new Datamonitor report, Shifting Paradigms in the World of Mobile Commerce Strategy, says: "The true potential of m-commerce, however, will not be realised for at least another three years."

In fact, several obstacles need to be overcome before mobile users start connecting to the net more frequently. At the end of last year, there was a shortage of Wap handsets but the situation is easing. It is also possible to web-enable mobiles, as Virgin Mobile is doing, without using Wap.

Then there is a shortage of internet content available for viewing on a Wap phone. And there are still some ease-of-use issues to be resolved.

Andy Mulholland, technical director of European computer services company Cap Gemini, says: "There are limitations and drawbacks which must be tackled and which make it essential that retailers recognise the phone as just one channel.

"For example," he says "the tiny text screen of a phone means that your communication needs to be displayed succinctly and simply. It does not afford the advantages of a relatively colourful PC screen that provides an opportunity for complex navigation and exciting images."

He adds: "The Wap phone is one channel which will sit alongside the likes of bricks and mortar, the internet and interactive TV. It can be seen as a kind of 'internet buddy'.

Nevertheless, Mr Mulholland says: "The importance of the web phone should not be underestimated by retailers as more than one million such phones will enter circulation this year, and in three years' time, 50 per cent of all mobile phones will be web-enabled."

On its Wap demonstration site, Cap Gemini shows how the technology might be used by a business traveller with time to kill before his train arrives. The executive could log on to the Net to find out what supermarkets are nearby and get some shopping done before catching the train. But what else might Wap be used for?

Datamonitor predicts that mobile financial services will be a key beneficiary in the m-commerce market. In particular it sees mobile broking as a "killer application", with the potential to push personalised real-time share data out to users.

It also forecasts: "The winning applications will be those that let users take advantage of increased mobility, time-constrained decision-making and location-based decisions." In addition, it expects mobile business-to-business applications such as fleet management, logistics, sales force automation and intranet and database access to generate profits for network operators and others.

However, Datamonitor warns that the US could beat Europe at m-commerce. Mr Hicks says that in spite of Europe's advantages such as widespread use of a single standard - Global System for Mobile - "the m-commerce focus may shift back to the US".

He points out: "In the US there is a single language with which to develop application content and internal services for a large population, an advantage the European market does not have.

"Also, internet penetration is very high in the US, as is the propensity to purchase products and services online."

However, making money with Wap could be problematic among subscribers used to free services. Kenneth Neil Cukier, international editor of Red Herring, the industry magazine, says that many services, such as maps and news headlines, will be offered free as a way to woo subscribers - who will expect this anyway, because it is closer to the model of the web.

He expects the revenues from the first wave of m-commerce applications (stock quotes, etc) to account for less than 2 per cent of an operator's revenues in 18 months, and to grow steadily, but slowly thereafter.

Waterstone's

new  services

Payment over the web


looking ahead
Future FTIT coverage

steve  luczo

View from the top


previous surveys
April 2000
March 2000
February 2000
January 2000
December '99
November '99

special reports
US Elections
World Trade
FT Telecoms
Connectis
FT-IT
FT Euro
FT500
FT Surveys