Mobile Commerce Applications, Part 1

9/4/2010 5:54:27 PM


Commerce, the exchange or buying and selling of commodities on a large scale involving transportation of goods from place to place, benefits from the convenience and ubiquity conveyed by mobile commerce technology. There are many instances that illustrate how mobile handheld devices help commerce. Important considerations that must be taken into account when trying to categorize applications include the nature of the communicating parties (e.g. people, intelligent agents, databases, sensors), the types of handheld mobile devices involved (e.g., cell phones, smart phones, PDAs, tablets), the nature of the transaction (e.g., push or pull delivery systems), and the actual content of the communication (e.g., a bank transaction, weather alert, or digital image). Not all m-commerce consists of buying and selling; other types of transactions such as banking transactions (e.g. bill paying) or polling (on-line surveys) are also of interest. In fact, "mobile transactions" or "mobile services" are probably more general terms for the concepts that we will discuss here. Obviously, no transaction can take place without some means of communication, whether it be face-to-face speech, so-called "snail" mail, e-mail, telephone, inter-office memos, or other means. Thus, one way in which mobile commerce applications can be differentiated is by their means of communication. For handheld mobile devices this will always involve some form of wireless technology, but the connection could transmit either voices or data.

Table 1. Taxonomy of transaction characteristics and compatible mobile applications
Characteristics Types of Mobile Handheld Applications
Voice, human-human, & cell/ smartphone/PDA/computer Talking
Voice, human-agent, & cell/ smartphone/PDA/computer Leaving messages and automated response systems
Voice, agent-agent, & cell/ smartphone/PDA/computer None (agents don't talk, though they can generate speech in order to communicate with humans)
Data, human-human, & cell/ smartphone/PDA/computer Chat rooms
Data, human-agent, & cell/ smartphone/PDA/computer Logging, journaling, editing, e-mail, web browsing, downloading, and on-line games
Data, agent-agent, & cell/ smartphone/PDA/computer Automated fund transfers and automatic toll payment

Another way in which mobile commerce applications can be differentiated is by the nature of the entities originating the communications on either end of the transaction; participants in m-commerce might be humans, or they might be intelligent agents representing humans or business entities, and in either case may be either at a fixed location or mobile. A third way to differentiate mobile handheld applications is by the computing demands they place on the handheld device. Applications which can run on ordinary cell phones are suitable for a mass market, while those that require more powerful clients like laptops are more likely to be aimed at smaller groups of users. Mobile applications that are location-aware will require a client device to have GPS capabilities, so that the user's physical location can be ascertained. Table 1 uses these taxonomy features to identify the fundamental nature of applications in each category.

The physical devices that support all of these various applications are evolving rapidly. At present there are a number of differently named devices competing in this application arena, including cell phones, "smart" phones, PDAs, tablet PCs and laptop computers. Future research is likely to focus on designing and producing a single device that will support all of these applications for most users. Although calling such a multi-purpose object a "phone" seems grossly inadequate, it will surely include that communication capability because cell phones are the most popular mobile devices today and are generally regarded as indispensable by their owners. The name that will evolve for this gadget is yet to be imagined.


Electronic commerce includes a wide variety of business applications such as tendering and auctions; mobile commerce applications not only cover all the existing electronic commerce applications, but also new applications such as mobile inventory management that are simply not possible for traditional electronic commerce. Mobile commerce applications are involved in almost every aspect of our daily lives, from the way we travel to work to the way we select our meals. Table 2 lists some major mobile commerce applications. More details of some of these applications will be given in the following sections.

Table 2. Major mobile commerce applications
Mobile Category Major Applications Sponsors Clients
Advertising Targeted ads and location-based ads Business Travelers
Education Mobile classrooms and labs Schools and training centers Students
Enterprise resource planning Resource management and managing a mobile workforce Business All
Entertainment Games/images/music/video downloads and on-line gaming Entertainment industry All
Health care Accessing and updating patient records Hospitals and nursing homes Patients
Inventory tracking and dispatching Product tracking and dispatching Delivery services and transportation All
Retailing Paying at vending machines, and checking product prices/ information Retailers All
Services Emails, instant messages, searches, etc. Telecommunication and content providers All
Traffic Global positioning, routing services, toll/parking paying, and traffic advisories Transportation and auto industry Drivers
Travel and weather Reservation services Airlines, hotels, and travel agencies Travelers


Income from mobile advertising is a major source of revenue for mobile content providers such as Yahoo! and Google. They use different ways to post advertisements and charge the owners of the advertisements. For example, Google's mobile ads appear on mobile websites or when users search Google from a mobile device. When users click on a mobile ad, Google will send the users to the mobile webpage or offer them the option to connect to the business phone of the ad. Yahoo!'s Mobile Ad Services (Yahoo! Inc., n.d.) offer a wide variety of ad formats, targeting options, and calls-to-action. The services provided could include the following features:

  • Display advertising: Ads are targeted using the same wide array of options as traditional web banners(e.g. context, demographics, behavioral)—and can take into account the user's location, which is a significant feature when marketing to consumers who are "on the go."

  • Search advertising: Here leads are generated using sponsored search links that appear at the top of search results in Yahoo! oneSearch.

  • Video advertising: Video is quickly moving to the "small screen" of the mobile phone, bringing with it new opportunities to engage and entertain consumers through a rich advertising experience.

  • Mobile ad tools: These offer a way for advertisers to select the call-to-action that works best for their business, for example by allowing customers to click through to a promotional site, find or call a store directly, be sent a coupon, or receive an SMS message.

Figure 1 shows screenshots of the type of advertising currently being used by Yahoo! mobile advertisers.

Figure 1. Screenshots of Yahoo! mobile advertisements © 2008 Yahoo! Inc.


Entertainment has always played a crucial role in Internet applications and is probably the most popular application for the younger generation. Mobile commerce makes it possible to download audio/game/image/music/video files at anytime and anywhere, and it also makes on-line games and gambling much easier to access and play. It is projected that the number of mobile gamers will reach a global total averaging 134 million users per month by 2010, with corresponding revenues of $6.1 billion. The following two sub-sections will discusses two important types of mobile entertainment: mobile TV and music.

Mobile TV

The IDC research firm says that by 2010 about 24 million consumers, representing 9.2% of U.S. cellular subscribers, will watch TV or video on mobile handsets, up from about 7 million this year, and revenue will roughly quadruple, to more than $1.5 billion. MobiTV Inc is a global television and digital radio service provider for mobile phone users. It delivers live television, premium and prime-time programming, video-on-demand (VOD), satellite and digital music services from the top broadcast and cable television networks and major music labels to millions of users worldwide. Currently, MobiTV supports more than 160 live and VOD channels such as MSNBC, ABC News Now, CNN, Fox News, Fox Sports, ESPN 3GTV, NBC Mobile, CNBC, CSPAN, The Discovery Channel, and TLC to 200+ devices across multiple networks, serving over 3 million subscribers. Its TV programs can be delivered across any network including 3G, WiFi, WiMAX and DVB-H. Figure 2 shows a screen shot of Sprint TV Live powered by MobiTV on a Palm 700p.

Figure 2.2. Sprint TV Live powered by MobiTV shown on Palm 700p © 2008 Sprint


Figure 2.3. Sprint's LG Fusic © 2008 Sprint


Mobile Music

Although many handheld devices include mobile music functionality such as that provided by the iPod, none can achieve the sound quality and convenience of the iPod or other digital music players. Consumers have been slow to embrace music phones for a variety of reasons . In addition to the relatively poor sound quality, there are problems with:

  • Ease of transfer: It is usually difficult to download songs or music from a computer to a handheld device.

  • Price: The prices of direct-to-phone downloads are usually higher than online downloads.

Figure 3 shows Sprint's LG Fusic, which features a built-in media player as well as a microSD memory port. This combination makes it possible to store huge amounts of music on the included microSD card and listen to it in stereo with a Bluetooth headset or transmit it to an FM receiver. Features like high-speed EvDO connectivity allow users to watch streaming TV, instantly download songs and play multiplayer games, all at broadband-like speeds.

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