Wireless: Don't Believe The Hype

Research analysts IDC scan the landscape of wireless commerce and conclude that the oasis on the horizon is farther off than has been promised. Read on to learn 10 key trends in mobile commerce over the next year.
By Adam Stone

From: IDC
To: IT Managers
Re: Role of wireless in e-business
Summary: Don't believe the hype

OK, that summary may be a bit reductive. But it more or less encapsulates the opinions of research giant IDC, where analysts have scanned the landscape of wireless commerce and concluded that the oasis on the horizon is farther off than m-commerce purveyors have been promising.

"There is definitely value there, but companies will need to approach every investment with caution," said Keith Waryas, research manager for mobile e-Business at IDC and co-author of the recent study "Ten Key Trends in Mobile e-Business."

Over the next 6 to 12 months, Waryas said, "you will see a ton of hype from the carriers as they try to generate data revenue in order to recoup some of the expenses they have laid out for infrastructure and licensing in recent years."

But as in the early days of the Internet, the researcher continued, the trouble is that actual performance will not fulfill the carriers' promises: "The networks will still be slow and the interfaces will be incredibly non-dynamic."

What should IT managers do about it? Press on, but be realistic. If your hot new idea for a wireless app won't work on a clunky network and a tiny monochrome interface, it probably isn't going to fly any time soon.

In this context, the IDC report offers a view of the immediate m-commerce future. Here are 10 trends for companies to keep in mind as their wireless strategies unfold in the coming months.

10 Key Trends in M-Commerce

1. Mobile commerce and Internet connectivity hype will peak.
"[H]ysteria surrounding mobile Internet will be driven largely by carriers and vendors that have invested huge sums of money in data infrastructure and spectrum licenses," IDC predicts. "These companies will continue their marketing and PR blitz in an all-out effort to raise end-user awareness and adoption."

The fervor will be warranted, to a degree. IDC forecasts that by 2003 there will be more than 1 billion phones on the planet capable of Internet access. But the authors caution that not all of these phones will be used for Web access, nor will mobile Internet users necessarily make the leap to mobile commerce.

2. Enterprise applications will become the white hot center of mobile e-business.
Wireless customer relationship management, salesforce management, and other enterprise applications will offer firms the chance to reap tangible benefits in terms of both revenue and efficiency. As a result, "mobile enterprise applications will be in the spotlight" this year, with consumer apps moving to the back burner.

3. Consumer use of mobile will revolve around information, not transactions.
On the consumer side, information services such as e-mail, stock quotes, weather, travel delays and itineraries, and point-to-point directions will lead the pack. Don't look for cash on the barrelhead; rather, think of these as an entranceway into a bigger room.

"Although these services do not represent direct commerce opportunities, they will be leveraged by e-businesses to help build customer relationships and open the door for indirect commerce," the authors posit.

4. Embedded barcode readers in phones will add a new dimension to click-and-mortar and mobile e-business.
This year mobile handsets with embedded barcode readers will begin shipping. "This new functionality promises to bridge the gap between brick-and-mortar and online commerce," according to the study. Embedded barcode readers "will allow mobile e-businesses to sidestep one of the most challenging obstacles to mobile commerce: data entry."

IDC sees this functionality being of special value to the mobile professionals, who are expected to make the most use of m-commerce apps.

5. Smart handheld displays will show some improvement, but form factors and raw data entry will remain problematic.
Better resolution and barcode-reading functionality will make mobile devices a bit more user friendly, but don't expect miracles. "[S]mall display size and cumbersome data entry methods will remain major handicaps," the study says. "IDC does not anticipate dramatic improvements in raw data entry or in screen size, which inhibit the functionality and usability of the mobile Internet."

6. Mobile security will become a hot issue.
"As the acceptance of Internet-enabled mobile devices grows, these devices will become just as susceptible to security concerns as their PC brethren. Security concerns will only be amplified as device capability and data sharing increase. Even though millions of data-capable mobile devices are currently in use around the world, mobile-device security mechanisms remain minimal."

7. Voice navigation will remain a work in progress
While voice seems a natural interface for mobile devices, the user experience still is not up to snuff and won't be any time soon.

8. Convergence will continue, but it will still be a multiple-device world
PDA makers will keep adding phone features to their devices, and phone makers will try to make their devices more like PDAs, but this will make decives bigger, heavier, and pricier. Most people won't accept that tradeoff.

9. Advertising will continue to expand to wireless devices
This year will herald the launch of wireless advertising, beyond the testing phase. It won't be a major revenue source for anyone, but it will open a new medium to advertisers.

10. Carriers must shift their distribution strategies
Carriers have largely talked to consumers up to now, but that is about to change. "With a great number of business applications having debuted in 2000, expect to see major carriers' distribution strategies shift from targeting end users to effectively targeting enterprises as well," the authors predict. "Carriers that best implement this strategy will be able to increase their penetration and will also be likely to increase their average revenue per user."

Adam Stone writes on business and technology from Annapolis, Md., for McommerceTimes.com, an internet.com Web site, where this story first appeared.

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