MOBILE COMMERCE:

- Niraj K gupta

The ‘i’ in "i-mode"

stands for ‘informa-tion’. However, in Japanese it also implies

"anywhere". Though I would prefer to call it the "intelligent

mode", simply put it means "Internet-mode" for mobiles. Japanese

are known to derive the best out of a technology and make it almost a daily

necessity–not just a gizmo or gadget. Similar is the story of

"i-mode", the new avatar of mobile phone in Japan.

NTT DoCoMo launched "i-mode"

in February 1999, and if its 7.3 million subscribers are any indication, it is

more than successful. A careful study of the service shows how a technology can

be quickly adapted to meet a growing consumer need. Everyone is talking about

how mobile and Internet are affecting our daily lives. And the sooner the two

come together the better it will be.

Positioning

A large majority of Japanese families

still cannot afford PCs at home due to space, cost, and other limitations. So

"i-mode" provides a very convenient method of not only gaining access

to the Internet, but also exploiting the tremendous opportunity thrown by

e-commerce, better called the "m-commerce" (or mobile-commerce) in our

context.

Instead of paying for airtime like in

voice calls, users pay only for the data sent and received, and for services

subscribed which are offered by now around 500 providers in Japan. The list of

"i-mode" content providers already reads like a "who’s

who" of Japanese leading businesses. DoCoMo charges users roughly ¥1,200

per month to access the service, with each e-mail message of 250-260 characters

costing roughly four cents. More significantly, DoCoMo collects nine percent as

commission for handling billing on behalf of i-mode’s official site operators.

Keji Tachikawa, CEO of DoCoMo, estimates that a user base of five million will

generate around $1.5 billion in fee from subscriptions, transmitted data, and

its nine-percent commission.

Popular services include mobile banking

(like Sanwa and Sakura banks), stocks and shares (like Daiwa Securities and

Nikko Securities), credit card transactions, news, and yellow pages (from NTT

itself)). Quite predictably, the two most popular services are the games and

karaoke information.

The key thing is also the simplicity of

usage. The user activates the service by pressing a special "i-mode"

button on the handset. The connection is continuous (until the handset’s

battery needs re-charging) and the menus are also easy to navigate–it takes

only two clicks to obtain the latest share price.

Operators could match DoCoMo’s

success by implementing its service model, which charges both users and content

providers for using the Internet over an existing mobile telephony

infrastructure. However, if the users find a service difficult to use, the

network operator is likely to suffer, i.e., if new content service truly

differentiates network operators, bad content could increase churn.

The Big M-Commerce Opportunity

The m-commerce opportunities are

immense and are everywhere. Your cell phone becomes your personal ATM, allowing

you to check the balance and transact. It can be used to know the latest

entertainment in the town and book tickets for your favourite shows. You need

not hunt for your secretary desperately to book air ticket and hotel for an

unexpected business trip. "i-mode" makes your cell phone your 24-hour

real-time travel agent. If you are new in the town and you need to find a good

restaurant, "i-mode" acts your guide. Not only that, it even helps you

book your table there. And the special discounts once in a while are a bonus.

The basic needs that generally drivers

m-commerce are:

• the need to purchase quickly (like
  
  train tickets) while mobile

• the need to buy merchandise (like
  
  gifts) in free moments in otherwise a busy day

• the need to conduct time-critical
  
  financial transactions such as transferring money between bank accounts,
  
  paying bills, or stock trading

As life gets busier leaving little time

for shopping, and given the fact that access to PC/Internet may not be easily

available all the time, m-commerce appears to emerge as



convenient tool. And so is the m-Internet (or m-Net) for information, learning,
entertainment, etc.

"i-mode" Vs WAP

In effect, "i-mode" operates

as a packet-based data service running over DoCoMo’s PDC network utilizing a

system developed by DoCoMo known as PDC-P. In terms of infrastructure, the PDC-P

system consists of a packet gateway which connects to other networks such as the

Internet, plus provides access to a packet subscriber processing centre which

carries packet to the mobile handset via the base station.

The crucial difference between

"i-mode" and other technologies such as WAP is the fact that

"i-mode" avoids intermediaries such as a dedicated server to interpret

between the existing HTML-based Web world and the mobile world. "Compact

HTML" (the language of "i-mode") is very simple for existing Web

designers to create, whereas with WAP, designers have to learn WML even though

it is supposed to be simple. Although "i-mode" connections look slow

compared to the potential speeds of over 150 Mbps offered by General Packet

Radio Service (GPRS), users point out that the system



utilizes compression and response times are, therefore, acceptable.

The Service Concept

The key reason for "i-mode’s"

success is that DoCoMo views it as a service rather than a technology. It also

has plans to migrate users over to a 3G version of the system once WCDMA

networks become available.

SFR, the French mobile operator, was

the first operator to give m-banking access to its customers using pre-WAP

technology and rolling out commercial services with BNP, CCF, and Credit Mutuel.

Some banks allow customers to view their bank/credit card accounts, transfer

funds, and even pay bills online. These banks also offer marketing services

through their WAP applications (order a chequebook, apply for a new service,

call account representatives, etc.). Banks are expected to increasingly provide

online banking transactions such as money transfers and bill payments.

In its WAP online offering, SFR

features around 20 applications (e-mail, ticketing, news, sports, horoscopes,

etc.). Banking is at third position in terms of consumer usage. Although this is

just the infancy of WAP online banking, these positive first results are

starting to convince banks to fully integrate WAP-banking in their overall

strategies.

Online stock trading is another useful

application on cell phones. Schwab launched online stock trading for Bell

Mobility customers. Just before that, New York firm w-Trade had launched an

online stock trading application with AT&T Wireless and Phone.com on the

PocketNet phone in Chicago.

And if Unimode from Indian "Gray Cell" and

"Wipro Smart" are any indications, WAP means a big opportunity for

India too!      

Niraj K Gupta