A Hard Look at Wireless Commerce Hardware

Is the business world ready for mobile electronic commerce? If recent product launches by handset vendors is any indication, the answer is a resounding “affirmative.” As e-commerce becomes an increasingly important and efficient way for companies to engage in business-to-business selling, and transaction activity explodes, the market is overflowing with new and upgraded hardware and software technologies.

While most support traditional personal computer-based activity, more products are being aimed at the surging wireless sector. The potential mobile commerce market is huge, with London-based research firm Ovum Ltd. projecting worldwide revenues to total $210.8 billion by 2005, and ARC Group projecting that 410 million handsets will be delivered in 2000. The Surrey, U.K.-based research firm forecasts that the handset “will rapidly become the single most important and valued personal items people have.”

Most users today just rely on handsets for voice communications and business-to-consumer transactions. But as newer wireless technologies make mobile handsets more conducive to e-business, handset and application developers are targeting the B-to-B sector.

A chief driver is the wireless application protocol (WAP), a universal standard for allowing WAP-enabled devices to easily access and exchange data with the Internet. More hand-held devices are being manufactured with WAP browsers to make them Internet-ready upon delivery.

WAP is designed to work with most wireless networks, including CDPD, CDMA, GSM, PDC, PHS, TDMA, FLEX, ReFLEX, iDEN, TETRA, DECT, DataTAC and Mobitex. It also can be built on any operating system including PalmOS, EPOC, Windows CE, FLEXOS, OS/9 and JavaOS.

Handset manufacturers also are developing products that support Bluetooth, a radio technology built around an embedded chip that makes it possible to transmit signals over short distances between telephones, computers and other devices without the use of wires. Bluetooth allows users to download documents to personal computers from their handsets.

WAP and Bluetooth are among the technologies that handset vendors are counting on to turn mobile devices into B-to-B transaction tools. “B-to-B mobile commerce has a lot of potential,” says Riddhi Patel, senior analyst for Aberdeen Group Inc., a Boston-based computer and communications consulting and market research firm. “All the enterprises and organizations want to extend their applications, information and content beyond the Internet and are looking to get it out to mobile devices. It helps with instant decision-making, and real-time information is becoming critical to any organization.”

In response, e-commerce vendors are extending their focus to the B-to-B sector from the more popular consumer market. In August, for instance, Santa Clara, Calif.-based Palm Inc., a leading provider of handheld computers, began shipping its Palm VIIx device that contains built-in wireless access to the Internet, 8 megabytes of memory-four times that of previous-generation models-and a screen that displays 12 lines of data.

The Palm VIIx can access more than 450 Web-clipping applications created for handheld devices. Content providers put the applications on the Palm Web site, and device users download the material using free software. The data is written in HTML.

“A lot of the applications can be written for specific markets,” says Jim Kruger, Palm director of product marketing. “Companies will be able to use the devices to look at real-time inventories and pricing, and sales people can do business on the road without having to run back to the office” to access their PCs.

While most of the Web-clipping applications are not tailored for B-to-B, mobile commerce designs will become prevalent as handheld devices become mainstream corporate products, Kruger predicts.

“We’re in the early stages,” he notes. “There still are issues of what can and can’t be done with handheld devices. You can’t instantaneously call up a picture on the screen, which is limiting. The telecommunications networks are slow, and you can’t run a lot of data. People won’t wait 30 seconds or a minute to view graphics.”

But transmission speeds are quickening. Wireless networks, which typically operate with 9 kilobytes to 19 kilobytes of bandwidth, soon will be in the 128-kilobyte range, analysts say. That is expected to accelerate the demand for content delivery.

“Bandwidth is very slow today, but as it gets much faster, you will have a better user experience,” says Andy Fox, chief executive officer of iConverse, a Waltham, Mass.-based provider of mobile applications and hosting services.

Global telecommunications networks also are rolling out General Packet Radio Service to transport high-speed data with global system for mobile communications (GSM) and time division multiple access (TDMA)-based wireless networks. It allows voice and data calls to be handled simultaneously and supports high-speed delivery of e-mail, Web browsing, and access to corporate LANs and intranets.

A key GPRS backer is Stockholm-based Ericsson, the third-largest wireless device manufacturer. Ericsson soon will launch the R520, its newest GSM handset that supports GPRS. GSM is the dominant wireless technology in Europe.

“Three key areas are increased bandwidth, the packet switch phenomena and the use of security tokens,” says Jacob Goldman, Ericsson director of business development for financial services. “An end-to-end system has to be developed for mobile e-commerce.”

Ericsson already markets the R380, a dual-band mobile phone with personal digital assistant functionality. It is built on the EPOC mobile terminal operating system, is WAP-enabled with a built-in modem and has a GSM 900/1800 dual band.

“Mobile handset technology is improving at an incredible pace, and many types of devices will be available,” says Randy Dence, vice president of business planning and development for w-Technologies Inc., a New York-based provider of wireless products and services. “You will see PDAs with voice capability and mo-bile phones with data capability.”

This user community is leveraging handsets and applications that are increasingly being tweaked for B-to-B commerce. Schaumburg, Ill.-based Motorola Inc., the second-largest mobile phone vendor, is working with application software providers and telecommunications carriers to support supply chain transactions, workflow approvals, auctions and reverse auctions through wireless devices, says Jim O’Malley, manager of global mobile e-commerce solutions.

Motorola’s Timeport P935 personal interactive communicator soon will feature w-Technologies’ financial service software applications. Functions will include wireless cash management and security trading.

The vendor also is teaming with Tokyo-based Sega Enterprises Ltd. to develop cellular phones with high-speed data processing that can access the Internet. The new devices are expected to be available next spring.

“An ‘800-pound gorilla’ in the telecommunications industry, Motorola is taking aim at its competitors in the mobile wireless race with its recent WAP-enabled phone introduction,” the Aberdeen Group notes in its “Mobile Electronic Commerce, The New Economy on the Move” report. “Motorola will need to continue its innovative ways to catch up to the market leader, Finland’s Nokia Corp.”

Time for High-Speed Innovation

Innovation is the name of the game for handset vendors readying for e-commerce. Security is another in-creasingly important component. Millions of wireless devices already hold chip-based subscriber identity module (SIM) cards in GSM handsets. The cards’ microprocessor chips store information on subscribers and hold encryption keys.

“Encrypting transactions is a big concern in the industry,” Patel says. “B-to-Busers have to log in with an ID and password each time they access a corporate database. It’s a lengthy pro-cess, but there is a need for security.”

Other obstacles to wireless commerce include a dearth of applications. But that also is expected to change over the next 18 months. “In the next year we’ll see tremendous growth in applications,” iConverse’s Fox predicts, “including the classic business applications of customer relationship management, financial services and sales.”

Indeed, Houston-based Compaq Computer Corp. and Helsinki-based Nokia recently began an alliance to develop and market end-to-end mobile Internet and intranet solutions to enterprise customers. The parties will integrate Nokia’s WAP Server software and Compaq’s ProLiant server running Windows NT.

The vendors will support CRM, order/shipment status, security and other applications. Nokia is positioning one of its newest handsets the 9110 Communicator for mobile commerce. The device supports e-mail, fax delivery and Internet access, and contains software for the Macintosh and Windows platforms. It is embedded with an AMD 486 processor and has data speed of up to 14,400 bps.

“The device has a much bigger display and a full keyboard for legitimate alpha-numeric input capabilities,” says Brett Roeder, director of wireless technologies for Seagull, an Atlanta-based mobile-commerce software vendor. “Most of the phones people use to access the Internet have small screens with four lines that display 15 characters. The newer phones have 10 lines and 30 characters.”

Handset manufacturers are studying more efficient ways to secure transactions and add applications. They also are working to make the phones smaller and lighter, with larger screens and faster transaction speeds. It may be a tall order. But with potential revenues for U.S. mobile commerce-enabling technologies projected to leap tenfold by 2004 to more than $1 billion, handset vendors have great incentive for moving into high-speed innovation.