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1 Newsletter Electronic Retailing & emarketing NEWSLETTER HERMES (Human Awareness Network of ecommerce) Issue No. 11, (August September 2001) Special Issue on MOBILE COMMERCE The ebusiness Center Athens University of Economics & Business This issue and all previous issues are available at: To subscribe or unsubscribe, send a message to: sofiaf@aueb.gr MOBILE COMMERCE AND ITS FUTURE Mobile communications and the Internet are expected to be the main drivers of the European telecommunications industry, and there seems to be no doubt that they have a high influence in changing the face of future business. New technologies are emerging and enable novel kinds of value-added services over wireless broadband connections. The evolving technologies of mobile telephony promise outstanding opportunities to Mobile Operators, Value Added Service Providers and Mobile Device Vendors as well as every business already in e-commerce or just examining the options of entering this market. THE MOBICOM PROJECT MobiCom is a European Commission funded project under the Information Society Technologies Programme. MobiCom aims to explore the fundamental factors affecting the development of Mobile Commerce. The key aspects that are being explored are market structure and dynamics, key player role and strategies, technology architectures, new products and services and consumer behaviour. The underlying assumption is that mobile telecommunications and e-commerce evolve on a convergence path, giving rise to new services, applications and business models. Towards this aim the following objectives are pursued: Identifying parameters in the evolution of mobile communications and e-commerce, which enable or constrain the development of m-commerce in Europe. Understanding the mechanisms of convergence and analysing its trajectory. Describing and specifying new business models and services. Analysing the diffusion and adoption of m- Commerce. Exploring alternative scenarios regarding the development and evolution of m-commerce technologies, services, business models and markets. Preparing guidelines on regulation and policy with a view to facilitating the growth of m-commerce. Building consensus amongst and fostering interaction between m-commerce stakeholders. Disseminating results at a broader European level. MobiCom is divided into three phases: The first phase involves analysis of the mobile telecommunications and e-commerce industries. It will demonstrate the fundamental characteristics of the two industries, which drive their evolution and growth. The results will be widely communicated in order to evaluate and validate the results and, if necessary, revise the conclusions. The second phase assesses the technological evolution and potential market growth in m-commerce. New services and applications will be assessed against socioeconomic factors that may affect their adoption and diffusion. Selective feasibility studies will provide input on the commercialisation process and market readiness. Industrial project partners and Special Interest Group members will be actively engaged in the process of devising the evolving characteristics of m-commerce technologies and services. The third phase involves a socio-economic analysis of the intensity of new market evolution. To this end, m- Commerce evolution scenarios will be developed with respect to critical issues that affect this process. In particular, specific scenarios will be developed on regulatory and policy issues, socio-economic impact, new market dynamics and new business models. SCENARIO PLANNING MobiCom seeks to explore ways in which key market participants can make sense of the m-commerce environment in order to cope with the uncertainty of the future. The evolution of m-commerce is affected by a wide variety of technological, economic, social and strategic forces that interact dynamically. In this context, businesses and regulators face significant obstacles in crafting their strategy for the future. Prepared by ELTRUN ( Edited by MobiCom Team (tel: , ioanna@aueb.gr, isideris@aueb.gr)
2 Electronic Retailing & emarketing, Issue 11, August-September 2001 (page 2) Scenario Planning Methodology is the key approach employed throughout MobiCom in order to tackle this complexity. Scenario Planning avoids forecasting in a complex environment and explores alternative futures instead. By anticipating alternative future developments for m-commerce, market participants will be better positioned to make informed decisions today. MobiForum is a collaborative portal, supporting the project with a range of applications. Scenarios are stories of the future. They are internally consistent, archetypal and describe temporary equilibrium states. But no scenario can be an accurate description of the future. Their role is to anticipate a range of potential futures and thus help managers to understand, consider and reflect upon uncertainties that they will face, instead of simply choosing the most attractive scenario. Each scenario is equally possible, because scenarios are a combination of estimations of what might happen and assumptions about what could happen, but they are not forecasts of what will happen. Scenario analysis tries to identify a set of possible futures, the occurrence of which is plausible, but not assured. Scenario writing is a highly qualitative procedure, although it may incorporate the results of quantitative models. It is based on the assumption that the future is not merely some mathematical manipulation of the past, but the confluence of many forces, past present and future that can best be understood by simply thinking about the problem. It makes more sense to consider a number of plausible assumptions, rather than a single one, which may later turn out to be incorrect. By surfacing, challenging, and altering beliefs, managers can test their assumptions in a non-threatening environment. Having examined the full range of possible futures, the company can more rapidly modify its strategic direction as actual events unfold. Thus, Scenario Planning is the ideal approach by which to prepare for the uncertain future of Mobile Commerce. Given the technological, economic and demand uncertainties currently confronted, strategic decision making needs a clearer picture of how these uncertainties right turn out in the future. MOBICOM OUTCOMES Current trends and developments in mobile telecommunications and electronic commerce. Analysis of new mobile services and business architectures. Scenarios for business models, market dynamics, social implications. Feasibility studies and business plans. Analysis of Mobile Commerce diffusion and adoption. MobiForum offers key market players all necessary information and a virtual place to meet. Thus, it provides a real time feedback mechanism for m-commerce evolution scenarios. Additionally, through various online events (workshops etc.), the widest possible participation is being sought. Users can take advantage of the following services: Technical and business information on m-commerce current developments and news A forum for virtual discussions on every hot issue Virtual workshops and conferences Observatory of m-commerce developments MobiForum provides a secure environment for collaboration among MobiCom partners and SIG (Special Interest Group) members. It serves as a central node for communication, collaboration and information dissemination for project participants. CURRENTLY OPEN DISCUSSIONS ON MOBIFORUM You are invited to submit your opinion on issues that are already being debated on The Discussions currently open are: Business Models European handset manufactures will not be able to deliver GPRS handsets on time. Is mobile commerce up to grabbing a bite of the financial institutions AUEB is member of GeM (Global emanagement MBA),
3 Electronic Retailing & emarketing, Issue 11, August-September 2001 (page 3) Consolidation and global players will dominate mobile commerce. Services and applications The next wave: EMS The role of Terestrial Trunked Radio (TETRA) in future mobile communications, particularly with respect to Public Sector organisations. Social Implications Mobile Commerce in developing Countries Responsibility for health risks Policy and Regulation Wireless ad standards You are also welcome to open a discussion thread on a topic of your interest at: SPECIAL INTEREST GROUP The Special Interest Group (SIG) was formed with a view to extending the debate on the future of M- Commerce beyond the project consortium. SIG members have privileged access to: MobiCom project results. A sounding board to test their views and to debate various opinions with colleagues from industry. A forum to voice their concerns and have an impact on European public policy. The means to shape MobiCom scenarios that will be disseminated through the project. MobiForum for collaboration and information dissemination. Each member maintains primary contact with one University member of the MobiCom consortium. Members meet physically at events organized by their local University, at European Workshops and virtually on MobiForum s dedicated resources. SIG members are expected to: Join online workshops that will be launched in an asynchronous manner for the purposes of crafting scenarios and policies on the future of m-commerce. Give feedback to MobiCom work-in-progress and results. Contribute their insight and expectations on the future of m-commerce. Participate in MobiCom conferences and workshops where project results will be presented and face-to-face debates in a structured setting will shape scenarios and policy guidelines for the future. THE INAUGURAL ATHENS SPECIAL INTEREST GROUP MEETING The Athens SIG was launched on May 2, Thirty participants representing a variety of industry stakeholders (operators, IT companies, the media, users, etc.) joined a lively debate on a range of issues. In preparation for the meeting, participants studied a draft scenario and returned their early feedback through a questionnaire. The scenario was titled Back To The Wireless Future and described a world where third party providers dominated the market while mobile operators were cornered in a commodity and low margin segment. During the meeting, the debate revolved around the divergent opinions, challenges and tradeoffs that emerged from the draft scenario and the feedback. A wealth of further ideas, arguments and proposals was generated. The intention was not to arrive fixed conclusions but rather to open up the issues to critique. The next Athens SIG meeting in September will focus on more specific questions and by using selected techniques participants will seek to develop particular scenarios. Similar SIG events are being organized in, and England. For more information please visit: or send a message to: ioanna@aueb.gr. EUROPEAN CONSUMER SURVEY ON MOBILE COMMERCE In the context of analysing the demand for e- and m- Commerce services on a European level, the MobiCom Project has conducted an online survey about user attitudes towards Internet and mobile services. The mobile user survey was carried out in three countries, namely, and. These countries represent different characteristic attitudes towards mobile commerce in Europe. The survey records the attitudes and perceptions of Internet and mobile telephony users in terms of new technology and services in mobile commerce (such as, GPRS, UMTS, purchases via mobile, etc). The rapid evolution of such technologies (i.e. implementation of GPRS) as well as the increased awareness in the business world (i.e. allocation of third generation ELTRUN is the ebusiness Center of Athens University of Economics and Business (AUEB)
4 Electronic Retailing & emarketing, Issue 11, August-September 2001 (page 4) licenses) creates opportunities as well as uncertainties for the future. The survey was conducted from March to May 2001 and was addressed to a self-selected sample of Internet users. This sample is representative of the most active segment of the market with respect to the adoption and use of new technologies with an average age distribution concentrated between years in the three countries. The total number of participants is 3730 and more than 94% of respondents are mobile telephony users. Among the survey findings, the cost of service, the usability of the device and the value of content emerge as key determinants of m-commerce adoption and use. More than 90% of participants expressed their intention to adopt m-commerce if the cost of service was lower. week () Voice based information services for information or other services 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100 % week () Reasons for Not Using Mobile Services Voice based information services Easiness Security Support Cost Device for information or other services 0% 20% 40% 60% 80% 100% (from 1=completely unimportant to 5=very important) Another important issue that was brought up by the survey results was low awareness among users of all the extra services they can exploit with their mobile devices (i.e. shopping, travel booking, etc.). week () With regard to the respondents self-assessment concerning new technologies, it is evident, that in and they like to experiment with new technology and they are familiar with their mobile phones. In, the respondents do not feel very confident in using their mobile devices and technology in general, although they are aware of their functions. It can be said, that with respect to adoption of new technologies, respondents are not necessarily always the first to try out new technologies and they do not always seek information about mobile devices on a regular basis. Self Assessment about New Technologies Voice based information services In the future, I will use more services Mobile phones have many useful functions for information or other services It is easy to use my device Experiment with new technologies I am the first to try new technologies 0% 20% 40% 60% 80% 100% Seek information about new devices (from 1=totally disagree to 5=totally agree) AUEB is member of GeM (Global emanagement MBA),
5 Electronic Retailing & emarketing, Issue 11, August-September 2001 (page 5) THE MOBICOM CONSORTIUM... a new model arrives in the market... a new model had better design... a new model had better games and sounds... a new model had better applications... a new model supported new technologies... my old phone becomes useless I would buy a new mobile phone if Athens University of Economics and Business ELTRUN The ebusiness Center Vodafone Pilotentwicklung GmbH Sonera Corporation The industry has a long way to go in terms of developing the right user friendly devices, producing valuable content and pricing services at the right level, which can lead to rapid market penetration. The survey leads to important conclusions regarding the growth of this market and the appropriate strategic responses by businesses. The full results of the survey are available at: CURRENT SCENARIO PLANNING WORK The ultimate goal of the MobiCom project is to develop scenarios of the future development of m-commerce in Europe. By following well-defined Scenario Planning Methodologies, current analysis work focuses on future services and applications. Some of the questions are: what is the size of the new market? What are the factors determining the adoption (or rejection) of new devices? Which services are going to spawn new markets? How will new services be charged and will they be profitable? The next project phase will shift its focus to new business models, market dynamics, socioeconomic impacts and policy and regulation at national and European levels. For example, analysis is expected to address issues such as interconnection between networks, the availability of services across network providers, the strategic role of mobile operators, new market entrants. In order to maximize the insight from analyzing these questions, the MobiCom Consortium seeks the widest possible participation to the debate. For this purpose, interested parties can join and the Special Interest Group. STET Hellas Telecommunications SA University of Cologne University of Jyvaskyla University of Brighton UK Verbrand der Veraine Creditreform e.v., Neuss Lambrakis Research Foundation PROJECT MANAGEMENT Professor George I. Doukidis Scientific Co-ordinator gjd@aueb.gr Ms Ioanna Constantiou Project Co-ordinator ioanna@aueb.gr Athens University of Economics and Bus iness ELTRUN The ebusiness Center 47A, Evelpidon Street & 33, Lefkados Street Athens, Tel.: Fax: Prepared by ELTRUN ( Edited by MobiCom Team (tel: , ioanna@aueb.gr, isideris@aueb.gr)
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